Knowing the Signs of Predatory SLC Mortgage Lenders

June 3, 2022

There are a few terms you never want to be hearing in the mortgage or any other loan world, and one of these is "predatory." A predatory lender is an individual or entity that are out to pull the wool over your eyes and make a quick buck by taking advantage of unsuspecting borrowers, and it's vital to steer clear of them for any loan you're taking out, especially a large mortgage.

At Integrity First Lending, not only are we here to help our Salt Lake City clients secure mortgages and find quality homes in reputable ways, including offering real-time mortgage rates and numerous other services, we're here to help protect our clients from risks like these. What are some of the red flags that a lender you're dealing with might be predatory in nature, and why should you steer clear of them? Here's a basic primer.

signs predatory mortgage lenders

Pushy or Rushing

First and foremost, the process of securing a mortgage is a lengthy and detailed one that requires a lot of paperwork, number crunching, and other elements. Any lender who is pushing you to take out a loan before you're ready or who seems to be rushing you through the process without taking the time to explain things in detail is likely not operating with your best interests at heart.

This is especially true if the lender seems more interested in having you sign on the dotted line than they are in answering your questions or addressing your concerns. A good, reputable lender will want to make sure you understand everything that's going on and will be happy to take the time to do so.

No Credit Check Required

Are you being offered a loan with no credit check required? That's a huge red flag right there. While there are some government-backed loans that don't require a credit check, most private lenders will definitely want to pull your credit report and score to get an idea of your financial history and repayment habits before they'll approve you for a loan.

If a lender is offering you a loan without even looking at your credit, that's a huge sign that they're not operating above-board.

Blank Fields in Paperwork

Another telltale sign of a predatory lender is if they ask you to sign blank fields in paperwork or leave sections of paperwork blank for them to fill in later. This is incredibly risky, as it gives the lender free rein to put whatever terms or numbers they want into those spaces, and you could end up with a loan that's not at all what you thought it was going to be.

Never sign blank paperwork, and always make sure that everything is filled in before you sign on the dotted line.

High Fees and Interest Rates

If a lender is quoting you extremely high fees and interest rates, that's another sign that something might be off. It's important to do your homework on current market rates to get an idea of what's reasonable, so you can tell if the lender is trying to charge you way more than they should.

Some fees and rates might be negotiable, but if a lender seems unwilling to budge on their numbers, that could be another sign that they're not looking out for your best interests.

Instructions to Misrepresent Yourself

In other cases, a predatory lender might explicitly instruct you to misrepresent yourself on your application in order to qualify for the loan. This could involve lying about your income, employment status, or other factors, and it's obviously not something you want to do. Not only is it dishonest, but it's also illegal, and if you're caught, you could face serious penalties.

A reputable lender will never ask you to lie on your application, so if you're being instructed to do so, that's a definite sign that you need to walk away.

Deceptive Presentation

In other cases, a predatory lender might try to present themselves in a way that's deceptive or misleading. They might use a name or logo that's similar to that of a well-known, reputable company, or they might give you the impression that they're associated with the government or another organization when they're not.

They might also claim to be able to help you with a loan when they're not actually licensed to do so. Do your research on any lender you're considering working with to make sure they are who they say they are, and watch out for any red flags that might indicate otherwise.

Asking for Bank Account Access

If a lender asks for your bank account information or access to your account, that's another sign that they might not be on the up-and-up. A reputable lender will never ask for access to your bank account, and if they do, it's a good idea to steer clear.

Hidden Terms or Fees

Have you ever read the fine print on a contract only to find all sorts of hidden terms and fees that you weren't aware of? If so, you know how frustrating it can be, and you definitely don't want to sign anything without knowing all the details.

When you're taking out a loan, make sure to read all the paperwork carefully, and don't be afraid to ask questions if there's anything you don't understand. A good lender will be happy to explain the terms and conditions of your loan, and they shouldn't try to hide any fees or charges.

For more on how to spot predatory mortgage lenders and avoid them, or to learn about our quality mortgage loan services in SLC and nearby parts of Utah, speak to the team at Integrity First Lending today.

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