Spotting Predatory Offers
The mortgage industry is full of "bait and switch" tactics. If an offer looks too good to be true, it usually is. Here is how to protect yourself.
The Short Answer
Never look at the "Monthly Payment" first. Look at the APR and the Total Closing Costs on page 2 of your Loan Estimate. That is where lenders hide their profit.
The Real Problem
The "Bait Rate." A lender quotes you 5.5%, but when the Loan Estimate arrives, there are $12,000 in "Discount Points" required to get that rate. They didn't give you a better rate—you just bought it with your own money.
Hidden Points
Look at Section A of your Loan Estimate. If you see "Origination Charges" or "Discount Points," that's extra money you're paying for the rate.
Junk Fees
"Processing Fee," "Underwriting Fee," and "Admin Fee" should be reasonable. If they total more than $1,500, you're being overcharged.
Unlocked Rates
If the top right of page 1 says "NO" next to "Rate Locked," your offer is just a guess. It can change at any time.
The 'Second Opinion' Framework
Send us your current Loan Estimate. We will review it for free and tell you one of three things:
We'll tell you to stick with your current lender. We won't waste your time.
We'll show you how to negotiate a few hundred dollars off their fees.
We'll show you exactly where they are hiding $2,000+ in unnecessary profit.
Step 1 of 4
Your mortgage journey starts here
What is the loan purpose?
Ready to take the first step?
Request a free consultation. We'll analyze your situation and offer the best financing options.
Locations
111 Buck Rd, Unit 500, Suite 1
Huntingdon Valley, PA 19006
Our Office
111 Buck Rd, Unit 500, Suite 1 · Huntingdon Valley, PA 19006