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Beware of "Special" Deals.

Just as an unheard-of interest rate may be quoted to you simply to get your loan application, a similar game can be played when it comes to loan programs. The program offered is not just any loan program, but a program that carries some unique qualifying features—qualifying features that not many lenders offer. If any do.

I'll give you an example. A guy wanted to begin investing in real estate. Rates were low, property values were on the rise, and he thought he wanted to make it big in the real estate business. But he had a slight problem: He didn't have any money. Or at least, he had the money, but he didn't want to use it.

So he began his search for a mortgage that would allow him to buy a rental house with no money down. He couldn't find any. Then he began to broaden his search a little further to loans with 10 percent down. He found one loan officer who said he had that type of loan. He did some more research and made some more phone calls, but no one could match what the loan officer had.

Skeptical, he contacted the loan officer and asked for more details. The terms of the note were not fully disclosed, and the lender certainly wasn't identified.

"The lender quotes on such loans only after review of the loan application and the credit report. I'll need to get your loan application, along with money for your credit report and an application fee."

The customer didn't bite. It sounded too fishy. In fact, there was no lender; the loan officer was trying to get a loan application and some money from the borrower, and then would either continue searching for the required loan program or get the client to the very end and change loan programs—long after the buyer had already paid for appraisals, inspections, and application fees.

If your broker has some loan program that no one else has—and I mean no one—don't go for it unless he's able to tell you who the lender will be and quote you rational loan terms. Don't give in to the temptation to believe that you've found the holy mortgage grail. You could very well lose lots of money, as well as your pride.

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