Sydney’s Mortgage Refinancing Scams: Avoiding Loss Of Profit – As mortgage repayment rates continue to approach historic lows, now may be a good time to look for a better deal on your home loan. As of February 26, mortgage repayments accounted for 67.5% of weekly mortgage applications, according to the Mortgage Bankers Association.
Fraudulent mortgage refinance scams have become especially problematic due to COVID-19. As people struggle to make mortgage payments, homeowners can become easy targets for scammers. Knowing how to avoid scams can help you protect your financial and personal information.
Sydney’s Mortgage Refinancing Scams: Avoiding Loss Of Profit
If you’re thinking about refinancing, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see the best rates upfront in just three minutes.
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Some refinance loan scams are subtle and others are more obvious. Knowing the most common red flags to watch out for can help as you compare mortgage refinance options. Here are some easy ways to avoid a refund scam:
Before providing any financial or personal information for a home equity refinance, you need to first know who you are dealing with. One of the most common mortgage scams involves phishing, where you are contacted by mail, email, phone or text message by a seemingly legitimate mortgage lender. If you receive an unsolicited offer to refinance your mortgage, do your homework to find out if the offer is legitimate. You can also contact Credible’s experienced loan officers to have your mortgage questions answered.
There are some costs involved in refinancing a home loan but a sure sign of a potential scam is being asked to pay a down payment before the lender will do anything for you. Refinance scams can also be characterized by unusually high fees or seemingly hidden fees that are added to the loan without explanation.
With repayment rates as low as they are, it is tempting to agree to the terms of the loan at the borrower’s suggestion. But scammers posing as lenders may use high-pressure tactics to get you to agree to a refinance loan without fully understanding what you’re committing to. Instead, take the time to compare mortgage rates using an online tool like Credible to see what you qualify for.
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No matter how low the loan rates are, don’t sign a loan without reading the documents carefully. Ask to see a “Loan Disclosure” if it hasn’t been provided to you and scan it to look for undisclosed or hidden charges. However, remember that you can still be targeted by a bait and switch scam, where the financial lender changes or alters the loan documents after you sign them.
Here’s a simple rule to avoid mortgage refinance scams: If something seems too good to be true, it probably is. A lender offering you low loan rates that you wouldn’t normally qualify for based on your credit score, for example, may be selling you a foreclosure to defraud you. Similarly, a lender who asks for your social security number, bank account number or other sensitive personal information right away is likely to identify you as a scam.
If you’re looking to save on mortgage costs, low rates make that an attractive prospect. When weighing up whether or not you should try and use close-of-record refinance rates, there are some things to consider first.
For example, how likely are you to qualify for a refinance and get the best loan rates? The coronavirus pandemic has led many lenders to impose stricter restrictions on mortgage borrowers. That includes taking a closer look at a homeowner’s credit score, credit history, credit utilization rate and debt-to-income ratio.
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Also, consider whether refinancing a mortgage makes sense from a financial standpoint. Even if you have low refinance rates, your refinance savings may be less if you don’t plan to stay in the home for a long time or if you’ve already paid off a large portion of the principal on your first home loan.
Using an online mortgage refinance calculator can help you estimate your monthly costs for a new loan. Shopping around for a refinance loan is also important. If you’re thinking about refinancing, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see the best rates upfront in just three minutes.
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If you’re a current homeowner hoping to refinance your home, scammers may be targeting you. They’ll use email, phone calls, flyers and even direct mail to lure you in, but be careful — these scams are designed to steal your money or personal information.
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From mortgage “assistance” programs to promising low mortgage rates, scammers use many angles to get what they want from vulnerable homeowners who may be struggling to make mortgage payments. In 2018, more than 25,000 complaints about “home improvement, improvement and products” and “Mortgage Foreclosure and Debt Management” were filed with the Federal Trade Commission, according to the FTC’s Consumer Sentinel Network Data Book.
If you’re looking to refinance, it can be difficult to tell a legitimate offer from a fake one. Here are some tips to help you do just that and avoid becoming a victim of mortgage refinance scams.
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Anytime you get an offer that asks you to disclose personal information in exchange for a service, you should be suspicious, says Katherine Hutt, national spokeswoman for the Better Business Bureau in Arlington, Virginia.
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Although you may receive official letters in the mail from time to time, you should generally seek help to refinance or modify your mortgage. In addition, you have to get your current lender to approve and sign off on any such change, and that can’t happen via email or over the phone with a third party, Hutt said.
“A common term is a special program that guarantees a low interest rate so you can refinance your mortgage,” Hutt said. He adds that there are always catches, such as requiring you to fill out forms with your personal information or make a payment to start your file. Some scams involve asking you to sign over the title of your home to a company or individual for help (don’t!).
Scammers will often ask for your name, address, date of birth and Social Security number to steal your identity – or sell it to someone else, which can be even more lucrative. In short, if it’s not your current lender and you don’t know the company or the person making the offer, it should set off alarms. The best place for such offers is usually the trash can, but if you think the offer might be legitimate, make sure you do your homework carefully before giving out personal information or paying for services.
The FTC has a list of other mortgage scams. Also, the FBI offers online resources to detect and prevent real estate fraud crimes.
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If you get a mortgage refinance offer (often disguised as “help”), scammers will sometimes ask you to pay a down payment to work with your current lender on refinancing. Another big red flag to wave: an offer that tells you to stop paying your mortgage and send money to a charity instead, Hutt says.
“They’ll use any angle possible,” Hutt said of the crooks. “To lock in low rates, they’ll ask you to send money via wire transfer, prepaid debit card or gift cards – all untraceable.”
Scammers who succeed in persuading consumers to pay large sums of money withdraw cash from an overseas account or prepaid card, then disappear with your money forever.
Asking for advance payments before the promised results are delivered is illegal, according to the FTC’s Mortgage Assistance Relief Services Act. The law states that the company cannot collect the fees until the homeowner has received an offer of relief from their lender and accepted it. So even if you agree to a mortgage assistance service, you don’t have to pay until the work or services are rendered to your satisfaction.
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One of the easiest ways to steal your money or personal information is to send phishing emails. They can send thousands of messages and make it difficult for authorities to track scammers, Hutt said.
If you receive an email from what appears to be a real bank or lender, analyze the URL and the sender’s email address closely; Scammers trying to steal your personal information often change the URL to make it look legitimate, but actually redirect to
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