How to Know if Your Lender is Trustworthy | Get Financial Freedom Tips | Transform Your Financial Future


Tuesday, July 21, 2015

How to Know if Your Lender is Trustworthy

When you need to borrow money, the last thing you want to have to worry about is the scruples of your lender. When money is exchanged, along with all of your sensitive personal information, you need to feel secure and that your lender is not out to rip you off or steal your identity. From auto title loans to big mortgages, you have the right to be treated with respect and honesty when you borrow money. So, how can you know if your lender is trustworthy? Put in a little time to do your homework and you’ll be able to rest easy knowing you are working with the right person and company.

Check for Licensing

Not just anyone can lend money. In order to be any type of lender, you have to be officially licensed. This is the first thing you need to check for when deciding to work with a lender. Ask if he or she is licensed to lend where you live, and then follow up and check to see if it’s true. Each state licenses lenders and you can check with your state’s attorney general office or state banking regulator to make sure your lender actually is licensed. If not, walk away.


Get an Honest Referral

One of the best ways to select any kind of service provider, from your mechanic to your mortgage lender, is to hear from those people who have already been there. If you’re looking for a lender, talk to your closest friends and family members about their experiences. You want to hear from people you trust, the people you know have your best interests in mind. They won’t lie to you and will give you an honest assessment of any lenders they have worked with in the past. 

Talk to Your Real Estate Agent

If you are looking for a mortgage lender or broker to buy a home, talk to your real estate agent. These are the people with the best insights into mortgage lenders and brokers. Through their clients they get first-hand information about how they work and how they treat their borrowers. Federal law prevents realtors from getting money from a mortgage provider, so you know you can trust the advice that you get. Many lenders use mortgage marketing strategies to encourage you to use their services, but a real estate agent will be able to honestly tell you whether a mortgage lender or broker is trustworthy or not.

Work with the Bank You’ve Trusted for Years

Another great way to find a lender you can trust is to simply work with the bank you have been using for years. If you have had savings accounts, checking accounts, and have used other types of services at one bank for a long time and have always been treated well, see what they have to offer in terms of lending. The downside to this is that you might not be getting the best rate. To save money, it’s best to shop around, but if trustworthiness is most important to you, it might be worth it to you to just go with the bank you know and trust. 

Check for Consumer Complaints

If you think you’ve found a good lender, with good reviews, who is licensed, and who is offering a good rate, but you’re still unsure you want to risk it, check for complaints. You can check with your state’s Attorney General’s office or banking regulator. You can also check with organizations like Americans for Fairness in Lending or the Better Business Bureau to see how other consumers have rated your lender and if there are any active complaints filed. 

Ask Plenty of Questions

Once you have a lender you think is trustworthy, make sure you get all the information in the fine print and answers to all your questions. A trustworthy lender who is not out to get you will be happy to answer all your questions and go over all fees and rates in detail. He or she should be perfectly willing to comb through your loan document and respond to all concerns or questions you have. You need to be fully informed before you borrow money. The more you know, the more difficult it is for anyone to fleece you.

Borrowing money is serious business, which is why it is regulated and why lenders have to be licensed. When looking for a lender it is important to consider how well you can trust the person or company behind the money. Don’t take the process lightly. It may seem like a lot of work, but it will be worth it in the end to dig through the information available to find the best and most trustworthy lender you can.

No comments:

Post a Comment