Home Equity Loans Place Many Home Owners

2750 WordsJan 5, 201711 Pages
Home equity loans place many home owners in temptation to spend money unnecessarily. Because these loans are relatively easy to qualify for home owners are inclined to see them as easy spending money. You will be accessing the cash in your home loan and you should not do this unless it is really necessary. You will be depleting the equity of your home. As the home equity loan is secured against your home the banks and money lending agencies are always pleased to lend you this money. It is easy to qualify for the loan. The lender will check your monthly income to make sure that you are able to pay off the loan every month and they will check your credit history. Many banks are willing to give home owners loans for more than the value of…show more content…
Now when you apply for your loan you will know how much money you need to borrow. This will prevent you from borrowing more money than you need or borrowing too little so that you cannot finish the project. Do you own your home? If you do, your home is your biggest asset. So you are thinking about getting a loan that is based on the equity you have in your home. You need to be careful and do your research. Homeowners, particularly the elderly, those with low incomes, minority, and poor credit, should be very careful when borrowing money. There are lenders out there that will target people who need a loan but don 't realize they could be putting there house right in the lenders dirty hands. I have seen this happen many of times. It is very important that people know what they are doing! Lenders do these over and over again; they go from equity stripping and loan flipping to hiding loan terms and packing a loan with extra charges. 1. Equity Stripping You are in a position that you need money now. You don 't have much money coming in every month and you have built equity in your home. A lender tells you that you can get a loan, even though you know your income will not be enough to make the monthly payments. The lender will tell you to "pad" your income on your application form to help get the loan approved. You need to be aware; this lender doesn 't care if you can
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