The world of lending is shady. People will tell you that. The internet is riddled with stories on how they became the target for scammers due to their desperation. Some would say that they might sound legit, however after all is said and done they realized that they lost more than they bargained for.
When you are on your way to buying a house, the excitement might often get to you as well as the need to provide a down payment for your construction loan primary residence as soon as you see the home of your dreams. These great experiences might leave you vulnerable to some shady strategies as well as tips to avoid them altogether.
A lot of people are eager to get the money that they loan. So much so that they are willing to shell out a couple of cash to be able to get it as soon as possible. If you are observing from the outside looking in, it might feel like a fair trade to be able to give a few to get a lot seems like a great deal. However, this is a strategy that you should look out for. No legitimate lending agency would ask for money up-front for a processing fee or whatever. It is a scam.
While it is true that some of the more expensive loans might require you to pay, these costs would often come from a credit check or even an appraisal.
There is no such thing as a 100% guaranteed approval. Sure that can happen if you have an outstanding credit score or a reputable business. However, this should not apply to all of the population. A lot of people would jump to the idea of a guaranteed approval, but lending agencies are not fond of lending to people they do not know and have no knowledge in their financial status. If you see a lender that assures you a 100% guaranteed approval on your loan even without doing a little bit of background check on your credit score. Walk away.
Request for Funds via Wire Transfer
You should not send money to a lender up-front. That is the golden rule. Scammers would think of different strategies to get money and not lend it. So sending money to the lender via wire transfer is a deal breaker for you. Whatever the reason, you should never send them money or pay them up-front. Remember, you are there to borrow money not to give it.
Unprofessional sales and service
When you are lending, you should not expect the lenders to be all fluttery and excited to meet you. Chances are, they can be cold and straight to the point. Kind of like having that first meeting with the parents. Kind of like when you are assessed if you are worthy for their daughter, so you are also evaluated if you are worthy of their loan. So being greeted with a smile as well as being assured that you have nothing to worry about is a big red flag that you should always look out for.
Good read: The 8 Best FHA Lenders to Use in 2019