When you purchase a home, you will have a number of fees to pay. One of those could be something called private mortgage insurance. Private mortgage insurance (PMI) is insurance to protect your lender in the case that you default on the loan. Here is what you need to know about private mortgage insurance:
3 Steps to Help Protect Yourself Against Predatory Lending
Just like knowing how to protect yourself from loan discrimination, you should know how to protect yourself from predatory lending when applying for a mortgage in KC. Predatory lending is lending money to borrowers with extreme terms and conditions. Those most susceptible to predatory lending are:
- The elderly
- Don’t be convinced to make a false statement
- Don’t be pressured into a loan
- Don’t sign a document containing blanks
Don’t Make False Statements
Lying on your mortgage application is a crime and you could be convicted of mortgage fraud. If your lender is telling you that it is okay to supply incorrect information on your application, find a new lender.
Walk Away If Pressured
No one should be pressured into a loan when applying for a mortgage in KC. If you are being pressured into a loan before you are comfortable with your options and have read the contract, it could be a warning sign of predatory lending. Signing the contract without looking it over could leave you with unexpected and expensive fees.
Don’t Sign Blank Documents
If you are applying for a mortgage in KC and you are handed documents to sign that are blank, do not sign them. By signing documents with blank spaces, you are leaving yourself open to unknown terms and conditions. If a form does contain blank spaces, put a line through them or write “N/A” to avoid being held liable for any information the lender inserts later.
What to Do If You Are a Victim of Predatory Lending
If you have applied for a mortgage in KC and found yourself to be a victim of predatory lending, there are some steps you can take:
- Contact your state Attorney General’s office
- Enact your right of rescission
- Submit a complaint to the Consumer Financial Protection Bureau
Your right to rescind before committing to a loan is a provision under the Truth in Lending Act. Once loan documents are signed, you have three business days to decide whether or not to cancel the loan. However, the right to rescind does not cover:
- Business loans
- Loans made for secondary residences
- Loans made to purchase a house