Fraud Prevention Month: Understanding Contracts
You will come across many contracts in your life, whether it be for credit cards, gym memberships, car loans or mortgages. Without understanding how to handle contracts, you could be opening yourself up to potential fraud or scams.
March is ‘Fraud Prevention Month’, so now is the perfect time to arm yourself with a real understanding of how mortgages work. Here’s what you need to know before you sign anything:
- Shop around, do your research. Make sure you have a full understanding of what each company is offering you. The more information you have, the more negotiating power you’ll have. Things to look for and compare: price, warranties, contract term and the conditions.
- Get recommendations: you can eliminate a lot of opportunities to be scammed, if you know who you are dealing with. Especially when it comes to big decisions like mortgages or car loans, get a referral or recommendation from someone you trust. You can also search Better Business Bureau as well.
- Don’t sign anything you haven’t fully read and understand. Make sure you read every contract in its entirety before you sign anything. And not only that, ensure that you really understand what it’s stating to, and don’t be afraid to ask for clarification. Another tip, never sign a contract that has blank spaces in it, this leaves room for a scammer to add information later on.
- How can you get out of it? Find out what the terms are if you need to get out of the contract. Are there penalties? You want to be able to plan for every worst case scenario.
Remember, a signed contract is a legally binding document, so you will have to live with what you agreed to. Generally, a contract cannot be changed or broken unless you and the other party both agree to it, so make sure you put in the time to understand it first.
And for some contract advice specific to mortgages, check out my tips on what you should understand and look for before you sign for a mortgage application or loan.
If you want a second opinion on your mortgage loan contract or want to inquire about the process, please contact me.
