It’s unfortunate, but mortgage scams happen to unsuspecting homebuyers’ everyday throughout Canada. Buying a home is a huge financial decision that needs to be carefully planned, researched and then made. There are a few different types of scams, but the 3 to watch out for when you’re shopping around are:
-
Online scams
-
Rent-to-own scams
-
Unlicensed or shady mortgage brokers
Although there are many other scams out there, these are the most common for many potential homeowners’ like yourself. Let’s dive a little deeper into them.
Scams Online
Although a number of Canadians shop and research online from the comfort of their own homes, shopping for property online can be quite a dangerous thing. If you’ve considered a private sale in an attempt to avoid hiring a mortgage broker, then it’s likely you begin your property search online. You need to be warey that the next ad or property listing you click on could be a scam. It could be just another scammer trying to pull one over on you. Here are a few cautions we have for you. If they’ve:
-
Asked you for money before you’ve met them or seen the home
-
Expressed reluctancy or straight out refused you a property viewing before receiving money
-
Scrapped stolen listing from reputable websites and are passing it off as their own
Red flags should be waving in the air in all of these situations. Avoid them at all cost.
Rent-to-Own Scams
If you’re a homebuyer who is considering a rent-to-own option in order to rebuild your credit. However, you should know that, even these options should come with a plan that sets out the terms on which you’ll eventually own the home. If you don’t have a financial professional to advise and guide you, you can wind up broke and having no legal authority over any property. You also want to ensure that lawyers are involved throughout this process. Huge red flags here are the sellers open refusal to sign binding documents or agreements and reluctancey to involve lawyers.
Unlicensed or Shady Mortgage Brokers
Just because someone says their a licensed broker doesn’t necessarily mean that they are. You need to ask to see their license. Even if they show it to you, you need to ensure they are there with your best interests in mind as well. Mortgage brokers are also not allowed to request money in advance in order to forge documents, so if they’ve suggested this then watch out.
Mortgage Scam Prevention Tips
To avoid and prevent mortgage scams and other fraud schemes, here are a few tips:
-
Make sure you know who you are hiring. Ensure you hire a licensed or accredited mortgage broker, or real estate agent. Anyone you hire should come with a good reputation and track record, so do your research on them and ask questions.
-
Hire a lawyer to review and explain legal documents to you before you sign them.
-
Ensure the lawyer advising you is your own. Speak to them about title insurance and other ways you can protect yourself financially.
-
Your lawyer should advise you if other individuals have financial interest in the home you want to buy, or if there are liens or property taxes owing.
-
Obtain the property’s sales history from the provincial Land Titles Office, and have accredited inspectors and appraisers, inspect and appraise the home. To know if they are accredited, an accredited appraiser should provide the MLS and property sales history.
-
Don’t pay any deposit, unless the funds payable to a trust, and held in trust by the vendor’s realty company, lawyer or notary public.
The best and most important tip we have for you is an old saying, “If it sounds too good to be true, it usually is,” so shop with caution. Get the experienced help you need, from a broker you can trust. Contact AKAL Mortgages today.
When we say Yes! We stand behind our promise.