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Friday, January 17, 2020

How to Avoid Mortgage Refinancing Scams

Many couples refinance their homes after a while but they must be careful as refinancing scams are unfortunately very real and very rampant. To avoid falling victim to these types of mortgage scams, here are some tips that you should always keep in mind.

If you're looking to refinance your home, don't risk sinking even deeper underwater by falling for a refinancing scam. These scammers can bury you in deeper debt, cause you to lose your home's equity, or even lose your house entirely.

When looking for an opportunity to refinance your mortgage, here are some tips you should keep in mind to avoid getting scammed:

1. Avoid companies that contact you

Scammers often use predatory measures to sniff out vulnerable people who are looking for ways to keep their home. Most of them will try to contact you via phone, email, or direct mail and try to bait you with an "easy way out." Instead of dealing with these suspicious companies, contact a reliable source only, like a trusted mortgage broker in Provo, Utah.

2. Don't give out personal information

If you receive a phone call, email, or direct mail asking for your personal information in exchange for their service, be wary. Many scammers like to offer enticing deals but not without asking you for your name, age, birth date, and Social Security number. If they get these kinds of information, they can steal your identity and commit fraudulent activities with it, which can cause disastrous repercussions for you.

When you receive offers like these from companies other than your lender, don't give out your personal information, especially over the phone.

3. Never pay upfront fees

Scammers can ask for upfront fees so that they can "work" with your current lender. They will usually ask you to pay through suspicious means (e.g. gift cards, wire transfer, prepaid debit card), which are untraceable and make it easy for them to run away with your money.

Requesting upfront fees is illegal; the FTC's Mortgage Assistance Relief Services Rule states that a homeowner doesn't have to pay a fee until their lender has accepted the request to refinance. So if you run into a refinance offer with an upfront fee, stay as far away from it as possible.

4. Find help on your own

Contact your current lender first to see what you can do with refinancing or modifying your mortgage. Try negotiating your current payment terms before looking for refinancing options. If you must work with a third-party, do plenty of research to make sure that the company is legitimate before doing business with them.

5. Be wary of suspicious emails

Scammers may use names of fake companies or the names of existing companies to do their bidding. Either way, you must be very analytical when reading emails that offer to refinance your home. These emails may want to trick you into giving out your personal information (phishing) or make an unnecessary payment to a fake company.

If you receive an email with one or more of these characteristics, it's probably a fake one:

  •                 It's asking for your personal information
  •                 The logo, web address, or email address don't look real 
  •                 The grammar, punctuation, or spelling is off       
  •                 The message is pressuring you or making you panic         

With these tips, you can have more peace of mind knowing that you know how to spot a refinancing scam. If you want to learn more about mortgage loans and refinancing, visit Intercap Lending today.

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