Mark Jenner & Co – Forensic Accounting Services

If you’re planning to purchasing a house with a mortgage, you must ask yourself, “how much house can i afford?”. This is because how big and expensive a house you can afford depends on your home loan amount. Once you find a house that befits your affordability, shop around to obtain a suitable home loan. However, you must keep in mind that there are various fraudulent lenders who can scam you by not disclosing fees upfront and then charging you more in the long run. So, you must gather knowledge about the various mortgage frauds and the ways by which you can prevent them.

Different mortgage scams and ways to avoid them

Some of the common mortgage scams and ways by which you can prevent them are:

*Appraisal fraud: Some fraudulent lenders inflate the value of your home and compel you to obtain a larger loan amount. These lenders don’t care about your affordability and their motive is to make you pay more as monthly payments. So, when you’re finding an answer to “How much house can I afford?”, hire an independent appraiser to verify the value of your property and accordingly determine whether or not you can afford the loan amount required to purchase it. In this way, you can prevent getting scammed to obtain a mortgage that you cannot afford.

*Not mention certain fees: Some scammers will not mention fees like appraisal fees, credit check fees, etc., upfront and include them in the total cost in such a way that it becomes difficult for you to realize that you are being charged unreasonably. To prevent getting scammed, you must ask the lender to provide you with a detailed breakdown of all the costs associated with your home loan.

*Lock your rate when market rates are high: Generally, there is a lag between the time you submit an application for the loan and when the interest rates are locked. Fraudulent lenders will misguide you to lock the rates when market rates are high claiming that they will rise even further. But in reality, the market rates will fall soon. So, you must check the market rates yourself before locking the interest rate on your loan.

When you’re obtaining a mortgage from a particular lender, check the ratings given to it by the Better Business Bureau (BBB). Lenders with high BBB ratings are generally reliable and offer good quality service.