Avoiding Home Equity Loan Scams

Home Equity Loan Warnings!

FTC warns: "The lender doesn't care if you can't keep up with the monthly payments. As soon as you don't, the lender will foreclose-taking your home and stripping you of the equity you have spent years building. If you take out a loan but don't have enough income to make the monthly payments, you are being set up. You probably will lose your home."
Watch out for lowered payments because there is a balloon payment at the end. Balloon payments are large lump payments due as the last payment. Don't do it!

Avoid home improvement scam which begins construction before any financing is settled. See Scams To Help You Lose Your Home.

Avoid pre-payment penalties. If you want to pay off your loan ahead of time, you should not pay a fee to do so. A 10% prepayment fee is not uncommon... but is a lot of money.
Avoid rate increases by avoiding missed or late payments.

 

 

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