If loan looks incredible, look closer

In the maelstrom that is mortgage lending today, consumers can’t be too careful. Loans that sound too good to be true just may be.

Before responding to lender ads, the California Department of Real Estate advises that borrowers beware the following:

Ads that promise a low interest rate -- say, 1% -- and extremely low monthly payments. Those loans almost always are fixed for a short time, sometimes only months, then convert to higher adjustable-rate mortgages and larger monthly payments.

An ad that appears to be from your own lender but actually is not. Do not respond to it.

Ads that look like notices from government agencies but are not. They may be lenders trying to sell you a loan.

Ads promising mortgage loans for no costs or fees. Most loans do have broker or lender origination fees and costs for title insurance, escrow and other services.

Bottom line: Watch out for your bottom line.