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How not to be taken by the oldest trick in the book "Bait and Switch"?

The mortgage lending business is notorious for baiting and switching. Baiting and Switching is when a loan officer or banking advertisement offers you one thing and then tries to sells you something else.

Typical signs of baiting and switching are obvious, some basic examples are:

1. Over the phone, you are offered a much lower rate than any other quote and once you've sent in your application the rate you were quoted has all of a sudden vanished.
2. You are offered a construction loan with no points and zero loan fees. What you are not told is that you are paying for it with a higher interest rate and the costs are built into a higher interest rate.
3. You are told that you will not have any payments while you're building. What you're not told is that all construction loans have this option and it's called "interest reserves" and the payments are added to the loan amount.

On the flipside of bait and switching, it is very important to realize that most loan products typically go hand in hand with banking guidelines. These guidelines are provided to loan officers to coincide with the customer's qualifications.

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