A List of Mortgage Provider Red Flags

This is going to be one of those occasional posts that gets expanded and reposted from time to time. This list is not exhaustive, although over time it is intended to become closer. If you have one, send it to me (dm at)



Any of these is sufficient reason, all by itself, not to do business with that company or person, to cancel your loan if in progress, or to go get another backup loan.







Any actual lie



Up front application fees, or sign up fees.



Up front lock fees.



Up front appraisal fees, as opposed to at the point of appraisal.



Any up front fee beyond credit report.



Requiring the originals of your documents.



Trying to sell you a Negative amortization loan, under any of its names, without explaining in detail all of the gotchas and limitations and why you need it (and you've got to be in pretty sorry shape to need it!)



Not locking your rate, or letting it float



On stated income or NINA loans, not giving a real idea of what the payment is going to be, and making sure you can afford it.



On full documentation or EZ documentation loans, needing to document more money than you make.



Requiring you to pay an "in house" appraiser (Who is receiving a salary)



Not allowing you to choose an appraiser if you want to (you should want to).



Not allowing you to order the appraisal if you want to (you should want to).



Consistently using the same phrase in response to a question. "Nothing out of your pocket" ($30,000 added to your mortgage) and "Thirty Year Loan" (note the absence of the words "fixed rate") are two that are sufficiently pervasive as to merit independent mention.



An answer to a question that is somehow similar, instead of to the question you asked. Especially if said obviously intended to distract and mollify you, or is a pat phrase you've heard them use before.



You check their calculations on a couple of calculators and the numbers are both consistent and different from what you were quoted as a payment. (Some web calculators lie, but they usually lie in slightly different ways, although note that an auto payment calculator uses different first payment assumptions).

UPDATED: here