You can spot predatory lending practices by paying careful attention in a few key areas.

Cash or other incentives
The old saying tends to be true: if it sounds too good to be true, it probably is. Don't get lured in by big cash promises.

Income padding
If you've been asked to lie about your monthly income, beware. This is not a sign of a reputable lender.

Balloon payments
Check your loan terms to make sure a single, large payment isn't due at the end of your term.

Inflated appraisals
Don't be flattered by an appraisal that says your home is worth more than you think it is. Predatory lenders often use this practice to make room for more profit.

Large prepayment penalties
Predatory loans often have large fees assessed if a borrower decides to pay off the loan before the term is finished.

Signing over your deed
Sometimes borrowers are asked to sign the deed to their house over to the lender who explains this is a temporary measure to avoid foreclosure. Reputable lenders will almost never ask you to sign over your deed.

Unnecessary insurance
Make sure you need the insurance you have on your loan. Be careful that insurance is not added to your loan without it being mentioned.