Getting a traditional mortgage is not as easy as it used to be. Most of the banks have come up with stringent rules and this has made everything harder, for this reason more people are now finding refuge within the private mortgage loans. Nowadays the private mortgage lenders have seemingly taken the place of the top mortgages Toronto after all they do not check the credit score or keep their borrowers pending through the approval process. Once you meet their requirements, the whole thing can take as little as 2-3 weeks and you will have the loan. It is for these good reasons that nowadays many lenders have come up and some unfortunately are out to con you.

Here are some of the things to avoid falling in the hands of scam lenders:

  • First of all, do not pay any money upfront. The idea of ‘good faith’ form of payment is generally a scam. In fact do not be in the haste of making any kind of payments, all you need is the real document according to Sherwood Mortgage Group.
  • It is important to know what you want.   There are many lenders nowadays and everything starts with their way of operation. Always look for the best ways to lower the risk on your side , in most cases, the private lenders will always want some good cushioning, in fact they are just more cautious than banks and just incase they are ready to give you up to 100% of the home value, be assured that it’s a scam.
  • Avoid the idea of doing things alone especially if you are venturing in this field for the first time. You need to hire an experienced lawyer with good knowledge in real estate matters. This is the only way that you will confirm the loan document is legal; there are cases where scammers can take advantage of your naivety and use a fake clause within the contract.
  • Get to know the people who are involved in the whole process. Just incase there is a broker, then you will have to       ensure that he has been licensed, many of them take responsibilities and end up       spoiling the whole deal by directing you to fraudulent lenders.
  • The worst mistake you can make is going for the balloon payments. Normally they don’t work, if your private mortgage loan lies in this category, and then ensure the payment period lasts from 3-5 years. You should also avoid giving the money directly to the lender.       In fact a check should be written and there should be a lawyer at that time for the purpose of trust, this is the only way you will prove to the lender that they have to complete their part before any down payment has been made.