Check out www.adamscapgroup.com for more Information on Guide to Investments.

1. Shady Home Equity Loan Practices to Watch Out For
There are various practices that some unscrupulous lenders could pull on you when
you take out a home equity loan or a HELOC. If you’re not careful, you might end up
paying more or worse, losing your home. Those who fall prey to these practices are
usually the elderly who might not like to read the fine print and those who have
credit problems and need money badly. You should always be wary of these shady
practices as these violate federal laws on credit, debt collection, and discrimination
based on age, gender, marital status, race, and national origin. If you see or smell
something similar to the ones below, run!
One of the most common practices is the bait and switch. The lender gives you a set
of loan terms that seems very reasonable when you’re still shopping for a loan. But
when the time comes to sign the contract, you are given another contract that
stipulates higher charges. Don’t make the mistake of confusing and just signing the
contract. Be firm that you want to sign on what you had earlier agreed on.
Be sure to read the contract very carefully and note if there are additional charges
for credit insurance and other insurance products to your loan. This is called
insurance packing, where the lender puts in additional insurance that you don’t
need into your home equity loan which can increase the amount you have to pay.
Together with these unnecessary products, you might also want to check out for
other fees that are not legal that are inserted into your loan. These are mortgage
servicing abuses where you ultimately lose out.
We’ve discussed this briefly above but always be wary when you’re offered
nontraditional loan products such as allowing you to pay the minimum payments
that do not even cover the principal and interest due for a certain honeymoon
period. Then when the time is up, you are faced with a balloon payment that you
can’t anymore afford. Remember, failure to pay your home equity loan also means
losing your home so you should not be slack when reviewing your repayment terms.
Finally, never sign blank papers or documents no matter who gives it to you. There
have been cases where a contractor offers to improve a certain part of a home at a
very affordable price. He says he can also arrange financing thru a lender if the
homeowner can’t afford it. Sometime during the remodeling, the contractor hands a
bunch of papers for the homeowners to sign, often threatening them that the work
will not be finished without it. The end result is that the homeowners signed blank

2. documents or documents which they were unable to read properly and to their
dismay only later realized that they were being saddled with a very hefty home
equity loan with outrageous terms.
A home equity loan or HELOC can help you get through rough times. But before you
get it, you should strive to get the best deal and avoid scams that can make you lose
your home.
Check out www.adamscapgroup.com for more Information on Guide to
Investments.
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