Banks and other predatory lenders rely on taking advantage of homeowners that haven’t done their homework for the majority of their profits. Banks rely on loopholes in the Real Estate Settlement Procedures Act to overcharge their customers and other predatory lenders have clever ways of disguising excessive fees. Here are several tips to help you avoid overpaying for your new mortgage loan.

I. Mortgage Refinance Information: Never Trust a Bank With Your Mortgage

The first thing you need to know when refinancing your mortgage is never trust your bank when it comes to a home loan. Banks are exempt from laws that protect homeowners from predatory lending practices in the United States. When the Real Estate Settlement Procedures Act was making its way through the House of Representatives and the Senate, the banking industry lobbied extensively to be excluded from the legislation.

Millions of dollars changed hands and when RESPA was signed into law, banks were exempt from the law. This means banks are not required to disclose their fees or tell you how much their markup is on your mortgage. Because of this loophole in the law your banker can blatantly overcharge you for the mortgage and you will be none the wiser. Other types of mortgage lenders that are not exempt from RESPA have to be more clever when disguising their fees.

II. Mortgage Refinance Information: Never Sign Blank or Incomplete Documents

If the lender or broker asks you to sign incomplete documents or asks you falsify information on the application you know this person does not have your best interest at heart. If you sign blank or incomplete documents the lender could add whatever they like on the document and you have already agreed to it. This is a common tactic employed by dishonest lenders brokers.

III. Mortgage Refinance Information: Watch Out for Excessive Fees and Interest Rates

Predatory mortgage lenders often qualify homeowners for sub-prime or bad credit mortgages even when they have good credit. If the fees from one lender seem out of line with other loans you are considering, question the lender on the fee. If you don’t recognize or understand the fees listed in your loan documents do not be afraid to ask questions. Asking questions will help you avoid overpaying for the new loan. You canget more mortgage refinance information, including common mistakes to avoid by registering for a free mortgage guidebook.