Home Equity Loans - Research Your Lender Carefully
Real estate prices are rising across the country, and
Americans are tapping into their home equity like never before.
Americans took out $431 billion in home equity loans in 2004, and
that amount may increase in 2005. The reasons vary; some are
using the money for home improvement, others are using the money
to buy real estate, and some are taking reverse mortgages in
order to enjoy a better retirement. With interest rates still
near historic lows and the bull real estate market continuing,
more and more predatory lenders are entering the lending
Most lenders are honest, and prospective borrowers will probably
not have any problems resulting from taking out a loan with a
national bank. On the other hand, newer, smaller, and less honest
lenders are advertising aggressively and may grab your attention
by offering terms that seem more favorable than those offered by
the larger banks. Sometimes, these terms sound too good to be
true, and they often are. Here are a few things to watch out for
when taking out a home loan:
- A promised low interest rate "disappears", only to be
replaced with a higher figure on the contract at closing time.
The borrowers, who expected to close right then and there, feel
pressured to sign and often accept the higher interest
- Previously unmentioned fees turn up on the application at
closing. Again, by presenting these previously undisclosed fees
at closing time, the borrower is pressured to sign.
- Blanks on the application form. It's hard to believe that a
lender would present a blank form and assure the borrower that
the blanks will be filled in later, but this actually happens,
and borrowers actually sign such deals. Remember, your
signature on the form constitutes your agreement to the terms,
even if the terms are filled in later.
These problems can be avoided by taking a few simple
precautionary steps. Ask about the total fees and interest
rates ahead of time. Inform your lender that you fully expect
to see those same figures on the documents at closing, and make
it clear that you will not sign documents that state otherwise.
Make certain that you have provided honest information to the
lender. Refuse to sign any blank documents. These things may
seem obvious, but when closing approaches, borrowers tend to
get in a hurry, as they are eager to get the closing out of the
way. Borrowing against your home is not something to take
lightly; you can lose your home if you unknowingly sign a
predatory document. Take your time.
©Copyright 2005 by Retro Marketing. Charles Essmeier is
the owner of Retro Marketing, a firm devoted to informational
Websites, including End-Your-Debt.com, a Website devoted to
consolidation information and HomeEquityHelp.net, a site
devoted to information on home equity loans.
MORE RESOURCES updated Mon. March / 08 / 2021
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Homeowner Loans - What's
It isn't difficult to get a homeowner loan if you own your
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