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Be careful when you look for a loan on your home. Whether you are buying a home, refinancing, or making home improvements, predatory lenders are ready to take your money and even your home.Predatory lenders lie and deceive about the costs of a loan, sometimes charging more than you can afford. These lenders have robbed hundreds of thousands of homeowners of their hard earned equity. As a result of these kinds of loans, too many families have lost their family home.

Here are six steps to get a good loan when purchasing or refinancing your house.

1) Get advice.

You need someone on your side. Housing counseling agencies can help you evaluate loan offers and assist you in getting the best loan possible. ACORN Housing Corporation, a HUD-certified loan counseling agency, can also help determine your credit-worthiness, assist with credit repair and even with debt and foreclosure counseling.

2) Make Sure Your Credit Report is Accurate.

Lenders charge higher interest rates and fees to riskier borrowers. Because lenders use your credit report to decide how risky they think you’ll be, it is very important to make sure that all the information on your credit report is accurate before applying for a loan. At ACORN Housing we can pull your credit report, review it with you, and help you fix any errors that it may contain. You can also obtain your credit report from the 3 major credit reporting agencies: Equifax, Experian (formerly TRW), and Trans Union.

3) Ignore high-pressure solicitations...

including home visit offers. Before you sign anything or give out your social security number, take the time to have an expert-- housing counselor or lawyer--look over any purchase agreement, offer, or any other documents.

4) Shop around.

Up to half the borrowers who receive high cost loans could have qualified for a lower cost loan from a bank. You can also get advice from a housing counselor to evaluate the loan offers you are receiving and to make sure you get the best possible loan.

5) Don’t sign anything that doesn’t seem right.

Don’t let the lender rush you, even if you’re told "that’s the way it’s done." Look over everything you sign to make sure all your information is correct, including your income, debts and credit. Do not sign blank loan documents or forms with blank spaces ‘to be filled out later.’ If you’re not satisfied with their answers, seek advice from a lawyer or loan counselor.

6) You can change your mind.

If anything is different at closing–don’t sign it. While you may be threatened with closing the loan, it’s better than losing your house from a predatory loan. You have three days after closing to change your mind for any reason, or for no reason at all.

The Federal Trade Commission recommends that you avoid ANY lender who:

• Tells you to falsify information on the loan application. For example, the lender tells you to say that your loan is for business purposes when its not.


• Pressures you into applying for a loan or for more money than you need.


• Pressures you into accepting monthly payments you can’t make


• Tells you its not important to read all the fine print in the loan papers


• Misrepresents the kind of credit you’re getting. For example, calling a one-time loan a line of credit.


• Promises one set of terms when you apply, but gives you another set of terms to sign, with no legitimate explanation


• Tells you to sign blank forms–the lender says they will fill them in later


• Says you can’t have copies of documents that you have signed

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