What are the Scams in Home Loan?

I remember an incident that happened with my cousin. He told us that he was planning to buy a house and he needed to take out a home loan. He was approached by a loan agent who offered him a loan at a very low-interest rate. He was suspicious of the offer, so he decided to do some research. He found out that the loan agent was involved in a

housing loan scam

.

We were so glad that he had done his research and avoided the scam.

Home Mortgage Scams

There are a number of scams that can take place in the home loan process in India. Here are some of the most common scams:

• Fake loans: Scammers may offer fake loans to people who are desperate for money. They may charge a high upfront fee and then disappear with the money.

• Exorbitant interest rates: Scammers may offer loans at exorbitant interest rates. This can make it difficult for borrowers to repay the loan and can lead to foreclosure.

• Hidden fees: Scammers may hide fees in the loan agreement. This can make the loan more expensive than the borrower initially thought.

• Property overvaluation: Scammers may overvalue the property that the borrower is buying. This can lead to the borrower taking out a larger loan than they need and can make it difficult for them to repay the loan.

• Fake documents: Scammers may provide fake documents to borrowers, such as income tax returns or bank statements. This can help the borrower to qualify for a loan that they would not otherwise be eligible for.

If you suspect that you are being scammed, please report it to the authorities. You can also contact the Reserve Bank of India (RBI) for assistance. 

I hope my answer will help you be aware of home loan scams in India.

Home loan fraud is the deliberate or intentional misrepresentation or omission of information while applying for a home loan. The most common type of home loan fraud is forging documents to obtain a loan, such as submitting false income or employment information to the lender. In this digital age, home loan fraud has become more prevalent. People fall prey to scams easily. You should be aware of what are the scams in home loan so that you do not fall for them. To know about some of them, at least, read this answer and get an idea. 

What are the home loan frauds in India?

I believe you all are aware that cheaters were calling people to share their bank details

or OTP, and once they did it, their money got deducted from the bank account. Similarly, cheaters can scam you by just calling. Here are some probable methods of scamming people-

In such cases, the scammer asks for some upfront fees in return for a low-interest rate for the home loan, so that the borrower easily falls for it. Once you pay it, you will never get it back.

Please be smart. No genuine bank will call or text you to avail yourself of a loan. A true lender will never willingly give a loan to anyone without first evaluating their documents, credit score, and other aspects.

Just because the lender has a website doesn’t mean it is genuine. Look for HTTPS in the website URL. It indicates that the site is safe and secure. Also, if there is any spelling mistake or grammatical error in the lender’s name or URL, be sure there is something fishy and do not go for it.

Always note that lenders will focus primarily on your CIBIL score. If you have a CIBIL score below 600, you will not be given a home loan. If anyone shows no or less interest in your CIBIL score, be sure you will be scammed if you proceed further. 

I hope you have got an idea about the home loan scams or methods. It is always better to check the background of the lender before availing a loan.

The loan approval process is quite lengthy. If the lender readily agrees to grant your loan without verifying whether the property has any legal disputes or not or shows no interest in knowing whether any other loan is availed against it, do not opt for it. An authorised lender will scrutinise the documents thoroughly and then only proceed with the loan sanction; if all these things fail to happen, be sure they are fraud.

A genuine lender will never grant you a loan without going through your income-proof documents and verifying them. If you witness that the lender has not taken your income proof certificate, yet is ready to grant your loan, know that you are on the verge of getting scammed.

You should not fall for home loan fraud after reading this answer and getting an idea about the scams.