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Watch out for predatory mortgage lenders

Fortunately, there are many trustworthy mortgage lenders in Minnesota that are ready to help people make a home purchase. These lenders understand that most borrowers take a cautious approach to a new mortgage. They respect a borrower's caution and refrain from applying pressure to make an unwise purchase.

At the same time, there are also predatory lenders waiting to take advantage of eager borrowers. Those unfamiliar with the way a good mortgage works can fall prey to these predators. Choosing an attorney experienced with mortgage lending is a great method of protection from predators. However, you can also look into the lender on your own. Following are three warning signs of predatory lending practices.

Nondisclosure of all costs: Untrustworthy mortgage lenders often make monthly payments seem low by not including insurance fees and taxes in the quote. This means borrowers are blindsided when they learn they must pay more than was initially indicated. Make sure to ask whether your mortgage payment includes these additional expenses.

Prepayment penalties: If your mortgage documentation contains language indicating that you may incur penalties for paying your loan early, it is wise to consider another lender.

Inflated lender fees: Lenders that want more than three percent of the loan as their fee may be acting in bad faith. You can identify the typical fees in your area by doing some research.

These are just a few of the methods predatory lenders use. If you are shopping for a mortgage, it is a good idea to learn as much as possible about good faith lending before signing any documents. A real estate attorney is an excellent source of information on these topics.

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