Protect Yourself from Predatory Lending

The best protection from predatory lenders is education and awareness.

  • Before you buy a home, attend homebuyer education courses.
  • Interview REALTORS® and ask for references before you select one to help you buy a home. Check to see if the real estate agent is licensed and is a REALTOR. 
  • Know how much you can afford. Manage your money wisely, carefully review your income and borrow within your budget. Do not inflate your earnings or bet on future income increases.
  • Get information about the prices of other homes in the area. Make sure you’re not paying too much for your home.
  • Choose a reputable, licensed broker/lender. Ask your family and friends about the lender they used.
  • Shop around for loans. This is the biggest purchase you will make, so make sure you compare costs. In the mortgage section of this guide, you can use the comparing loans worksheet.
  • Do not make dishonest statements on your loan application. Make sure information accurately reflects your financial situation. Lying on a loan application is fraud and may result in criminal penalties.
  • Do not borrow more than you can afford.
  • Never sign a blank document. Insert N/A or cross through any blanks.
  • Do not feel pressured to sign a loan document if you are not comfortable with the information in it. If you are unsure, talk to an attorney or one of the counseling agencies in the area.
  • Be suspicious of any contractor who raises the price if you do not go with their lender.
  • Be honest about every piece of information you provide.
  • Understand how much the entire loan will cost over the life of the loan.
  • Make sure the fees are reasonable.
  • Read every word in a loan document and check everything for accuracy.
  • Talk to a non-profit housing or consumer credit agency before you consolidate your debts into a home equity loan.