Refinancing can be an extremely stressful time especially if you decided to inquire online. Perhaps you saw a rate quote ad, received an email or visited the Lending Tree or the Lenders Network; but in order to protect yourself, be on alert for scams or shady business practices that could lead to identity theft.
Mortgage shopping according to Zillow means knowing the difference between direct lenders and brokers and understanding the advertising tactics used to attract you as a borrower. To get the best loan, it is ideal to obtain offers from at least 3 lenders or brokers so you can compare pricing. According to the Federal Trade Commission, since a mortgage broker could represent several different lending institutions, be sure to ask what their fee is because brokers get paid separate from your loan related costs. The FTC also advises that if you are going to refinance using a broker that you should contact more than one to ensure you get the best deal.
Broker versus lender
According to the FTC, a broker is not obligated to get you the best deal unless you sign a contract with them making them your personal agent. A broker shops for loans so they are not always concerned with your personal situation. While some brokers are willing to do the work to obtain you the promised deal, your refinance may not be as clear as it would be with a lender because they cannot lock in your rate. The time it takes to close a loan using a broker could also be extended due to unexpected additional requirements made during processing and underwriting.
When mortgage shopping through the Lending Tree it is best to use a lender who will consider your entire circumstance and get you the best loan based on your needs. A direct lender controls the entire process and will tell you right away if you qualify based on their criteria, so you won't waste valuable time. But the good thing is that both lenders and brokers are mandated by law to provide you initial disclosures detailing the terms of your refinance transaction. So basically, what you see is what you get with a lender, but that may not be the case if your broker cannot get you the promised loan.
Identity theft mortgage safety
When it comes to refinancing your home, always question who you are dealing with before you decide to move forward. All too many times victims of identity theft will cut corners hoping to save time and headaches; but in reality it is best to be super sure, than not sure enough. Identity theft protection starts with being stingy with who can look at your information; so again if you do decide to use a broker, check to see if they have any complaints against them not just with the Better Business Bureau but with online consumer reviews such as http://www.consumeraffairs.com/scam_alerts/scam_alerts.htm or http://www.scambook.com/
Be safe not sorry
Mortgage shopping is a time to take the right steps, so to keep yourself safe from identity theft or other mortgage scams, spread the word if you receive a suspicious email, text or advertisement. You should also forward it to the FTC by visiting https://www.ftccomplaintassistant.gov/#crnt&panel1-11 If you are a Santa Ana resident, contact the Santa Ana police department at (714) 245-8665.
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