Home Equity Loans: Watch for Scams
A home equity loan can be a great way to get the money that you need in a short amount of time. But just like any other loan, there are scams that you need to watch out for. By knowing the most common scams that are involved with home equity loans, you will then be able to act with confidence.
Listed below are a few of the details and scams that are involved with the home equity loan industry.
1. A lot of people that get a home equity loan due so because they have fallen into the trap of taking out loans to pay off other debt. They will take out a home equity loan in order to pay off a credit card, or another debt that may be collecting interest too fast. The reason that this can be done is simple. The lender has no problem giving out a home equity loan because they know that if they do not get repaid that they can simply take back the collateral, and make their money back.
The process of obtaining a home equity loan in order to pay off other loans and credit cards, just so you can make more purchases, is known as reloading.
The constant process of reloading can lead to a home owner being further in debt than their collateral will cover. This can turn into a major problem if your income changes and you can no longer pay off your home equity loan in a timely manner.
2. Scams are all over the place when it comes to taking out a home equity loan. The best way to avoid this problem is by dealing with a lender that is reputable. You will want to avoid any lender that claims that falsifying an application is acceptable. Not only will this put your finances in jeopardy, but it can also get you in a lot of trouble.
Also, watch out for lenders that try to switch the terms of the home equity loan on you as you are signing the agreement. In other words, they will tell you that you have secured a certain rate, and then as you are signing the papers they will try to switch things around.
Finally, never be pressured into taking out a home equity loan that you cannot afford to repay. If you let this happen to you, you may end up losing the home that you have worked so hard to pay on.
Even though there are some negatives that go along with taking out a home equity loan, there are also a few positives that go into it as well. Just make sure that before you take out any home equity loan that you know exactly what you are getting yourself into.
A home equity loan may be what you have been looking for. If this sounds like you, contact a qualified lender and get started today.
|About the author:|
David gaIan has been in the real estate business for over 10 years. Beginning with a single rental he now buys houses for cash, can stop foreclosure, and provides information for commercial properties. David gaIan is the owner and operator of houseoption.com a website dedicated to helping homeowners facing foreclosure and other house related problems. You are free to publish this article unedited on your site as long as all links back to us remain in tact. We Buy Houses
e-mail: david_commercial at houseoption.com