Home Equity Loan Predators

Be very careful when looking for a home equity loan.

The home equity loan industry has proven to be an area that many less than honest companies operate. This kind of lending attracts those schemers and dishonest people who will try to still your money and home. They will use misleading sales pitches and scandalous contracts full of hidden terms and fees.

It is of utmost importance that you practice due diligence when seeking a home equity loan or any other transaction concerning your home. 

There are many honest banks and finance companies with reasonable terms and fair prices. You can find them by doing research and comparisons. This is something that will affect your life for years to come. 

Home Equity Predator Eliminators

Eliminator 1 - Don't talk to anyone that comes to your door uninvited or calls you on the phone. You know the type, using the  pushy, high-pressure sales pitch. The legitimate lenders just don't do that. The predatory lenders will do it. They will often target the elderly, immigrants and lower-income homeowners, which may have little financial experience and are least likely to know they're being conned.

Eliminator 2 - Don't fall for the hype of special deals that promise bigger loans and lower monthly payments than other lenders offer. The thing is, predatory lenders aren't worried about whether can repay the loan. Their primary goal is to get you to default on your loan.  Then they can foreclose and seize your house. These predatory loan contracts usually allow them to repeatedly raise the interest rate on your loan, thus pushing the monthly payments way beyond what you can afford. This is the start of your downfall. When you miss a payment, you will receive a bill for extra fees and charges that drives your payments ever higher. The next step is default and you lose home.

Eliminator 3 - If you are asked to deed your property over to anyone, don't do it! The really legitimate lenders will never ask you to sign the title to your house over to them. The predatory lender will promise to return the title when the loan is repaid, but they really intend to keep it.

Eliminator 4 - Don't sign any documents until you've read and understand them. Read the fine print for damaging terms. These are the terms that the salesman will deliberately fail to disclose. If you're asked to sign a contract documents that has blank spaces to be filled in later, stop right there, cancel the deal and run don't walk away. A reputable lender would never ask you to do that.

Eliminator 5 - Never ever sign for a home equity loan that requires you to buy credit insurance or other extras. These have little or no value and will dramatically increase your monthly payments and the risk of default.

Eliminator 6 - If a contractor that is giving you an estimate to do repairs or improvements to your home recommends a lender, forget about it. These contractors may be front men for predatory lenders. The lender charges you fees for the loan then claims the money must be paid directly to the contractor. The so called contractor does a shoddy job and disappears and you have to pay off the loan.  The lender will tell you that the contract was between you and the contractor and you must pay the loan or they will foreclose.

Home equity loan predators are out there, just waiting to make that next dollar and steal your home.  So when you decide to get that home equity loan, practice due diligence.