Avoid Mortgage Traps

Avoid Mortgage Traps

If you're in the market for a mortgage, you'd do well to arm yourself with some knowledge before you go knocking on lenders' doors. I'll soon point you to where you can learn a lot in short order, but first, here are a few mortgage traps to be wary of:

• Overcharging

When you get a mortgage, you'll unavoidably face a flurry of fees. But not all of them are perfectly legitimate. Ask for itemization of fees and scrutinize them. (Know that if one lender quotes you a very low interest rate, it may make up the difference in steep fees.) If a mortgage broker is charging you an underwriting fee, question it, since the lender does the underwriting, not the broker. If you're charged $100 for a credit check, question that, since these generally cost between $10 and $20.  

• Bait-and-switch

Be on the lookout for lenders offering deals that seem too good to be true, such as exceptionally low interest rates, closing costs, and other fees. These low rates may be available only to those with perfect credit scores, and once the lender has you in the door, he or she will reel you in. Keep your eyes open and know that you can keep shopping around. You don't need to stick with a lender if you're not being given what you were told you'd get.

Learn more how to avoid other mortgage traps…

Tell us if you've fallen into any of these traps before, or had any bad experiences you would caution other readers about?