
How to Avoid Private Mortgage Scams in Canada
How to Avoid Private Mortgage Scams in Canada https://guardianfinancing.ca/wp-content/uploads/2017/05/mortgage-5-1024x435.jpg 1024 435 Guardian Financing Guardian Financing https://guardianfinancing.ca/wp-content/uploads/2017/05/mortgage-5-1024x435.jpgA few years ago, getting mortgages from traditional lenders like banks was not as difficult as it is currently, and it seemed that the only prerequisite to access a mortgage was a pulse. But since the banks tightened their lending rules, many people have found themselves locked out, and their only avenue to get a mortgage is by approaching private lenders.
However, this comes with considerable risks, including higher interest rates. You also need to be aware of the pathetic level of scamming taking place in the private lending sphere and it is vital for you to know how to identify such scams so that you don’t fall victim.
Here are some of the things you should never do when you are dealing with private lenders, lest you get scammed:
Don’t pay any money upfront
One trick used by scammers in the private mortgage lending sector is to ask for a “good faith” payment so that they can do an underwriting to check whether you indeed qualify for the loan. Never fall for this trick. Don’t give out any money till you get the loan you needed. Making such upfront payments is simply asking for trouble.
Know what to expect
You should know that most of the private mortgage lenders may not be in a position to give you 100% of your home’s value and the interest rates will not be particularly low. You should thus have realistic expectations when dealing with such lenders to ensure the best outcome. Also be very careful in instances when you think the offer is too good to be true.
Always hire a lawyer
Hiring a lawyer may cost you a few hundred dollars, but it will be worth it. With the help of a local attorney specializing in real estate deals, you will be guaranteed that everything in the loan document will be clear and legit. It is better to invest a few hundred dollars in attorney fees rather than losing thousands after getting scammed because you never bothered understanding the fine print.
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