With the increase of lenders and the need to borrow, financial scammers have found ways to reap people’s hard-earned money. It is advisable that whenever you need to borrow, you perform proper research on the legitimacy of your lender before committing. While there are many ways that one can use to determine whether the lender you are dealing with is legit or not. One must make sure that the method they are using doesn’t infringe on the companies’ or users’ privacy. Today with the growth of technology and the internet, you need not struggle much. Instead, you can always use online feedback from previous clients to know if a lender is reliable. An important aspect that can help prove the reliability of your lender is their loan’s validity period. Some of the ways to determine the reputability of your lender include;
- Check for spelling and grammar errors
Any good company wants to maintain high standards of communication. Some red flags to avoid include lenders with grammatical and spelling errors in their websites or brochures.
- Lenders’ website
Today Every active company wants to have an online presence. A lender without a website or one whose website is unstable should always make you think twice.
- Face to face referrals
Marketing by word of mouth is a traditional but good way to get a message from one person to another. You can ask for referrals from friends and family. If no one has done business with your chosen lender, you need to be cautious about them.
- Phone and landline number
Take time and call the lender’s phone number and landline and see if it’s active. A company that is serious about business will have operational and functional numbers. As you talk, listen to the treatment from the other end. Is it professional and satisfying? Did they answer the questions you asked the way they should, or was the person sounding uncertain about the information they were sharing?
- About information
On the about section on the company’s website, you’ll find background information such as when the company was established, their registered business address, and the company name. You can also check on the US Security and Exchange Commission company search to verify whether it is registered.
- Know your mortgage options
One of the critical aspects of finding a good mortgage lender is knowing the different types of mortgages available. By doing some research upfront, you’ll be able to distinguish facts from fiction. This will help you know when a mortgage lender is issuing you an uncommon type of mortgage loan that is potentially a scam.
- Office structure and representative
How are the company’s offices? How are its structures? A reputable company will have good-looking and well-maintained structures. Avoid lenders whose offices look untidy or are located in insecure neighborhoods.
The lender’s representative should also relate with clients ethically and professionally. They should adequately answer any questions you have and also give you ample time to make your decisions.
- Credit score
As lenders check for a client’s credit score, also check for your lender’s credit score. This involves checking if they are stable financially. Avoid lenders on the verge of insolvency. A good lender should have a good credit score.
- Other crucial details to consider
Many details can be used to prove the reputability of a loan lending institution. This can include checking the directors’ information and the company’s group structure. This will play an important role in keeping you safe from lenders that may not be legit.
- Fees charged
Most of the fees charged on loans are included in the loan repayment plan. Such fees include origination fees and appraisal fees. Therefore, it is rare for a bank or any other loan lender to ask for an upfront payment from a client before they process a loan.
- Origination fee
Typically, this fee is charged to cover miscellaneous expenses that are incurred in the loan issuing process. They may entail the amount a broker or the person who referred you to the lender is paid.
- Appraisal fee
If the loan you are applying for needs collateral, the bank or your lender will need to know its worth. In a majority of instances an appraisal company is hired to assess its worth. You will be needed to pay for this cost, and this is the appraisal fee. A reputable company will provide you a copy of the appraisal report.
In conclusion, you have important tips that can help you locate reputable loan lenders with this article.