The real estate market is filled with opportunists who want nothing more than to encourage you to part with your money, and receive very little in exchange. They can exist anywhere really, and can be as unassuming as your subdivision groccer and as friendly as the town’s gossip. The schemers in question don’t care about how well you sang in the community choir, how long you’ve been saving up for a down payment, or even what your gender is. Their reason behind approaching you is to simply get your hard earned money and leave you with much less than you started with. These next few scams are how most new dream home owners fall prey.
The loan flipping scam
This method of getting your money begins with a promise of new beginnings. The person calls you up, excited about the most recent deal, telling you that refinancing right now is the best possible option. Then, about six months later he contacts you again, with a even more tempting deal. The flip side to all this refinancing is that you will be adding extra monthly fees, interest payments and time to your mortgage debt. These types of deals always seem to sour in the end.
Insurance Packing
Another common trick used by less than honorable lenders is to add things such as credit insurance or other miscellaneous products that you as a property owner may not need. The items they insist on rarely offer any good protection, and only lighten your wallet. The lender or agent may caution you about outlandish scenarios that could happen, but in all practicality probably would not. Prior to signing up for the additional products, think about this: is the scene being presented reasonable? Or does it simply gain him more income?.
The Bait and Switch Scheme
Whether selling Westminster Colorado homes, Longmont Colorado real estate, or anywhere else in the country, it’s pretty much always the same:This scam is most often seen when you go shopping for your first home, or when you are trying to downgrade to something smaller when you reach retirement age. The first thing that happens is the mortgage broker comes forward with a wonderful deal, one that almost seems too good, and certainly to excellent to overlook. The scheme then turns from bait into switch mode, where the original deal is changed quickly and sometimes quite profoundly. It starts with an addition of insurance at one place, an increase in the needed down payment, or an extra fee, and the original deal is turned into a confusing monster that cannot be recognized. Then it is just a matter of pressuring the novice buyer into signing off on the deal to “save” all their hard work. It ends up being a deal that they can’t handle for something they really don’t want. These are three of the most prevalent home equity scams that are in the market today.. If you understand how these schemes operate, you’ll be able to protect yourself more easily.e}