Salmons went straight to one of two vice presidents of mortgage lending with the company. “I threatened to contact the state agency on predatory lending. Everything changed at that point,” Amir says. The couple purchased the house putting down around 20%, with a 30-year fixed-rate mortgage at 8%.
Having been in the home buying game over the last seven years, the Salmons have learned to watch out for a few money traps. They offer the following advice:
Do your research. Study up on various mortgage products so that you understand the differences between them. Check with your local bank or go to www.bankrate.com. Fannie Mae’s Website (www.fanniemae.com) has a Homepath section that helps home buyers find the right mortgage and lender. “Know how to decipher and speak the [lender’s] language,” Amir recommends.
Go to school. Consider attending a homeownership education course offered by the U.S. Department of Housing and Urban Development. Call 800-569-4287 or go to www.hud.gov to find a nonprofit counseling agency.
Shop around. Check with three or more lenders and compare costs. Be suspicious if any realtor or property developer tries to steer you to just one lender. Get information about the average prices of homes in the chosen neighborhood.
Keep all records. Keep track of all correspondence, including e-mails and telephone conversations. Make sure you have copies of all documentation.
Report misleading practices. If you believe you are a victim of mortgage fraud, contact Fannie Mae at 800-732-6643 or firstname.lastname@example.org. Check out the Center for Responsible Lending at www.responsiblelending.org or call 919-313-8500 for information on predatory lending.