Knowing Mortgage Loan Scams

Mortgage loan fraud are becoming a common ground for scammers to run their business. These scams often grow in numbers especially during a slow economy where real estate is slow and prices are high. Mortgage loans become a favorite vehicle for fraudsters when it comes to loan scams.

Identifying the different ways these fraudsters operate on mortgage loan can help you prevent from getting victimized. Being aware and identifying necessary actions come when the knowledge of how these fraudulent acts are being carried out.

Here are some common mortgage loan fraud that are carried out.

  1. Deed Theft

This happens when fraudsters pretend to be mortgage professionals that offer you refinancing your existing mortgage loan at a much lower interest rate. This is done by including, as part of the pages that need to be signed, a page that authorizes the transfer of the property to an individual or a company. The transfer may be for a period of time or depending on a term from the new mortgage refinancing.

  1. Payment of Upfront Fees

The most common fraudulent act that evolves around all kinds of loan is when the lender requires the borrower to pay upfront fees. With mortgage loans, scammers are charging high upfront fees that is justified by the value of the loan amount. Paying upfront fees is never a requirement for legitimate lenders. A lender should always be treated with red flags if they require payment for upfront fees. There is no reason for any lender to charge upfront.

  1. Mortgage Buy and Sell

Residential mortgages can be sold and bought by banks. Some fraudsters pretend to have acquired your mortgage who them assumes in receiving your amortization payments. They are too good with their craft that they can convince the borrower. The borrower pays for a few amortization and the only time they are able to find out is when their bank informs them that they have been in default in paying their mortgage loan amortizations.

How to Manage Your Personal Loans

If you are planning on getting a personal loan, it is best to properly plan and think of a strategy on how to actually deal with the loan. Often, the people who apply for a personal loan fails to create a plan regarding a personal loan. Personal loans like other loans can turn into an unmanaged debt. It is important for the borrower to ensure knowledge and strategy on managing a debt. It often takes a few years of having additional expense when engaged in personal loans.

Here are a few tips to help you in managing a personal loan if you plan to get one:

  1. Identify a goal or need for the loan

You have decided to take a payday loan. It is very important that you have identified what the loan is being used for. Make sure that the amount of the loan is only for what you need. Avoid getting a loan that is more than what is required for your need to avoid unnecessary expenses. Some people do take a loan because they have been offered by a lending company. Avoid the trap of having “extra cash” mentality as it will also create additional expenses you may incur in the future.

  1. Choose the loan that fits your goal and needs

Make sure you scout lenders and identify different loan packages. Every lender may offer something different from the other which may be beneficial to your need or goal. Compare loans by having a compare sheet with you. You can identify the important information you can find from different loan packages and assist you in making an informed decision of which lender and loan package you prefer to avail of.

  1. Create a budget summary

This is an important step that most borrowers miss. They evaluate their income and make a general assumption that they can pay off the monthly amortizations. That could be the biggest mistake a borrower can make. You need to know your numbers and identify your income and expenses. This will help you ensure that you will be able to pay off the loan within the duration of the term.

How Does a Credit Card Work?

A credit card is a tool that an individual or an organization can use for managing their transactions. Credit cards have been proven an effective way to make one’s transactions efficient and convenient. But how does a credit card really work?

Credit Card

A credit card is an ID sized card that contains a chip and/or a magnetic strip which contains the personal information of the card holder. This personal information is the same information that one needs when making a loan. If an individual or an organization needs to make a purchase, presenting this card grants the purchaser the right to pay the merchant the corresponding price/fees involved for the product or service.

Merchant

A merchant is the entity from which the credit card holder purchases a product or service. By presenting the credit card with a merchant, the personal information is then transmitted to the credit card issuer who validates the credibility of the card holder to pay. Once clearance has been obtained by the merchant, the merchant receives a confirmation to proceed with the purchase. This gives the merchant the peace of mind that the product sold has been paid.

Credit Card Issuer

The credit card issuer is a bank entity or any financial institution who acts as a guarantor/payor to a merchant. The credit card issuer pays the merchant in advance for any purchase or payment made by the account holder. The credit card issuer then charges the account holder for the purchase. These charges remain as a debt being charged by the credit card issuer with interest. The credit card issuer is then in charge of collecting the sum purchased by the credit card holder.

Credit Card Holder

The credit card holder is the individual or organization who makes use of the credit card to pay it’s purchases and expenses. Once the payment has been made, the holder is then obliged to pay the entity issuing the credit card as they have paid the merchant for the purchase made.

Avoiding Business Loan Scams

Putting up or maintaining a business requires continued flow of cash to sustain all its expenses, cost of expansion, and growth. An entrepreneur will have a time in a business’ lifetime to opt on getting a loan. It can be during the startup of a business to raise capital or during the life of a business where it is time for expansion or growth.

During these moments, a business owner may be too excited for the decision and may rush into getting a loan. But as business owners, we need to be aware of any types of fraud that loans entail. To avoid being caught with these fraudulent acts, here are a few things that needs to be kept in mind.

  1. Upfront Payment of Fees

When a lender requires upfront payment of fees, it’s synonymous to find a more reliable money lender singapore. No lender requires upfront payment prior to the loan amount being released. Lenders who ask for upfront fees is a red flag of trying to collect money out of the business without really having the intention to provide a loan.

  1. Online Application with Lack of Physical Address

There are several lenders out there who would ask to apply online but would no longer require the borrower to go to their office. These online lenders often insist that a visit to their office is not required. Always do a background check on the lender. Knowing about the lender will helps the borrower make the right decision on which lender to partner with. Getting a business loan for the business means looking for the perfect partner who can contribute to the success of the business.

  1. Guaranteed Loans and Cash Advances

Beware of lenders advertising “Guaranteed” loans and Cash Advances as they often entail fraudulent activities. They often offer very high interest rates and hidden fees. These types of lenders try to attract you with avoiding all paperwork and credit check especially when a business owner is excited to start with the business or business expansion.

Knowing When You are Ready to Get a Mortgage

Deciding to purchase a house becomes more affordable when done through a mortgage. But before making the decision of getting a mortgage loan, a borrower needs to ensure that they are prepared to manage a mortgage.

Mortgages take years to pay and may require a strategy in managing them. Mortgages take commitment and discipline to be paid off that is why it is highly recommended that you plan and review your decision of getting a mortgage for paying off real property purchase.

Here are signs that prove you are ready to purchase property through mortgage.

  1. You Are Debt Free

A good tip when getting a mortgage loan is that you should not have any other debt up your sleeve. Mortgages are high value loans that often entail high amortization fees. Freeing yourself from other debt will help you pay off your mortgage much easier and faster. Being debt free from credit cards and other loans will allow you to use that extra cash to pay off your mortgages at faster and better pace.

  1. Having a Steady Source of Income

One requirement you need to avail of a mortgage is having a steady source of income that is sufficient to cover your cost of living and paying off your monthly amortizations. Being confident that you will not lose the steady source of income within the next few years is a big sign that you are ready to purchase property through mortgage.

  1. You Have the Ability for Good Down Payment

It is very important that you have enough savings to pay a healthy amount of down payment. Your down payment actually contributes to how much you will be paying for your amortizations. A good savings amount should be in place that once the down payment has been paid, you still have enough in your savings to cover any emergency expenses that may come up.

A purchase of real property is a big responsibility and preparing to get your mortgage going is very important.