Home Loan Scams: How To Protect Yourself from This Common Mortgage Scam
We all know that the housing market is really booming in India. There are many people who are looking for a home loan, and hence banks and financial institutions are flooded with the loan applications. But unfortunately not all the applications are genuine. As a result of this situation, most of the people have started falling prey to fraudulent home loan applications. These scammers are getting rich by fooling innocent people into believing that they are doing legitimate business.
These scam artists mostly target those people who are looking for a low-interest home loan and hence, it is very easy for them to convince the people to give them their hard-earned money.
Here are some common scams that the innocent people usually fall into.
1. Free Home Loan
The first scam that the people fall into is free home loans. The scammer convinces people that the lender will give them a free home loan in exchange for some personal information. However, the lender does not actually send the free home loan, but rather uses that information to steal the money from the applicant.
2. Fake Realtors
Most of the fake mortgage agents use the names of real estate agents to get information about the prospective home buyers. Sometimes they even make friends with the home buyers and invite them to their office. The agents ask the people to give them details of their family members or their salary.
3. Fake Email
There are many instances where people have fallen into this trap. Sometimes a person gives them their email ID and other details for the purpose of opening an account. However, the scammers don’t use the information to open the accounts, but rather steal the money from the applicants.
4. Fake Loan Offers
These are quite similar to free home loans. People call their loan providers and tell them that they have a great deal on the table. After the people sign up for it, the lenders take the money from their accounts and don’t even provide the loan.
5. Fake Insurance
Most of the fraudsters are selling a product called “Life Insurance”. They promise a higher interest rate than what the borrowers usually get in a bank. They persuade the applicants to sign the papers and then pocket the money.
6. Fake Bank Loans
This is one of the biggest scams that people fall into. The fraudsters pretend to be a bank and ask for a personal loan. Usually, they offer the low-interest rate of 3% to 5% as compared to the usual rates of 12% to 15%.
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The second thing that these scammers do is charge you additional fees. One of the main reasons why you should be skeptical of these loans is that they’ll charge you a number of fees. They might charge you for appraisal, processing and recording fees. If you have a bad credit score, they might even charge you for that, as well.
There are some legitimate lenders who might require you to provide proof of income. However, most of the time, these people are simply using your bad credit history to their advantage. If you’re struggling to pay your bills, they can threaten to report you to the credit bureaus if you don’t quickly pay up.
In addition to these fees, you’ll also be charged a monthly fee for their services. If you decide to cancel your contract, you might even lose access to your own money.
How to protect yourself from these scams
Since you’re already paying someone to manage your finances, it makes sense to hire a financial manager to help you navigate the world of home loans. The best people to do this are those who have
Conclusion:
If you are looking to buy a house, then it is important to be aware of these scammers. Make sure that the loan provider is legitimate before giving them any information.
Home Loan Scams: How To Protect Yourself from This Common Mortgage Scam