equity loan payments – home

February 16, 2010

Equity Loan Scams – the Truth About Equity Loans

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — @ 10:19 pm
Jim Wilson asked:


Although it appears relatively painless to start up a new equity loan, there are issues that you must deal with to avoid equity scams. Actually, much of the things that you’ll read here are not discussed regularly. Before you enter into your loan, please think about this…

Let’s make it abundantly clear that a lot of lenders on the equity loan marketplace are legitimate lenders; however, a few lenders are taking advantage of the poor and the ignorant. These underhanded lenders present catchy loans, yet fail to advise the borrower about buried expenses or balloon charges. Buried charges are routinely stripped from loans, since the APR is a supposed safety net to the borrower that weeds out buried costs. Abusive lending practices range from equity stripping and loan flipping to hiding loan arrangements and packing a loan with excess fees.

Equity Stripping is one of the leading scams on the loan marketplace. Lenders will attempt to seperate you of your hard earned money by stripping most of the equity from your home. They will actually strip you of your house after you default on the loan. The lenders engaging in equity stripping will routinely present to borrowers (Wow, what a deal!) deals, leading you to swear that you are saving money. Consequently, once the borrower consents to the agreement, the lender will display new fees, overpriced interest, and other charges that puts financial pressure on the borrower, until he or she breaks and fails to make payments on the mortgage. The lender then repossesses the house, selling the home for profit while the borrower is left with no home and no place to live.

Therefore, the Federal government has prepared the information to help borrowers avoid losing their equity. Because equity stripping is becoming a huge industry, the Fed’s urge homeowners to lookout for equity stripping, plus being aware of lenders that are offering loans that reach higher than your earnings. Evidence of the scam is when a lender says it’s fine to exaggerate your personal income. The lender may influence you to establish a loan with monthly payments that are exceedingly high for your salary. The loan is accepted, because the lender reports your wages as higher than it actually is.

The feds also instruct borrowers to stay conscious of loan flipping, which is the process of switching loans on regular basis and requesting bigger amounts of money on each refinance applied. Loan flipping functions this way: When a customer fails to make payments on a loan, the lender offers to renew the loan and excuse any missing payments. Some lending companies are refinancing loans time and again in a short window of time.

You will likewise want to lookout for PMI, which is personal mortgage insurance, which is a requirement; though, a few lenders try to charge for further coverage that is not required. Consequently, homeowners, specifically the less fortunate, should read the details of any loan offered carefully.

If a lender is browbeating you to sign a contract, you will need to approach another lender, since pressuring borrowers is a definite warning that the lender is out to take you for a ride.

In spite of everything, the final choice for coping with house equity scams will be your responsibility. Use the suggestions in this report to find the best process for dealing with your money and you will enjoy peace of mind.



Ben

December 4, 2009

Reasons to Consider a Home Equity Loan

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — @ 11:52 am
Andrew Obidowsk asked:


If you are a homeowner and are in need of some extra cash, you may want to consider getting a home equity loan. Equity is the amount of value you have paid off on your property. For instance, if your home mortgage is worth $150,000 and you have paid off $50,000 of your mortgage, you have $50,000 in equity on your home. With this equity you have in your home, you can take out a home equity loan on this money.

There are two types of home equity loans available; Standard Home Equity Loans and Home Equity Lines of credit. With a Standard Home Equity Loan, your loan is assured by the amount of equity you have in your home. This is the type of loan option you should choose if you are in need of a very large loan. A Home Equity Line of Credit is akin to a credit card. With this option, you can withdraw money from an equity account that has been set up with your equity amount. This is a better option for you if you are not needing a large amount of money.

A Standard Home Equity loan generally is a little more difficult to obtain, only because it has a more complex process. These loans generally have a fixed term to them, meaning you will have a pre-determined number of payments over a set period of time. They generally will also have a fixed interest rate and fixed monthly payment. The amount of the loan you receive will be provided to you in one lump sum.

With a Home Equity Line of Credit, an account is set up for the money to be placed into. You can then make withdraws on the money as you need it, and then make payments back into the account. These types of loans generally have a fluctuating rate of interest, however you will only have to pay this interest if you have a balance on your account from the money you have borrowed.

There are many reasons why a person may choose to take out a Home Equity Loan. Many people take out these kinds of loans if their home is in need of repair or reconstruction. If there are large changes they want to make, such as a new heating and cooling unit or new windows, they will take out a home equity loan to pay for them. Others will use a home equity loan as a means to get out of other debts. They will use their Home Equity loan as a form of debt consolidation, to pay off some of their other debts and only have to make one monthly payment. And still others may take out a loan to pay for a new car, or even a large family vacation.

There are countless reasons why a person may choose a home equity loan. Once you get the money, it’s up to you what you choose to do with it. Just keep in mind that this is a loan you will have to pay back, and if you fail to do so, it could very well cost you your home and all of your equity.



Heather

November 27, 2009

Equity Loans for Self Employed Entrepeneurs

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — @ 12:38 am
Jim Wilson asked:


Everybody has heard of equity loans, but not many people are familiar with self employed equity loans. These loans are individually created to meet the financial needs of those that are self-employed. You’ll find it is actually becoming more common, and the more time invested in research, the easier you will find the ideal loan at competitive rates.

You may have purchased a home while you were employed at a normal company and nowadays you are currently running your own show, but have determined you want an equity loan to pay off the pending balance of your loan to add to your weekly cashflow.

You recollect the day you applied for your first loan, being aware how straightforward it worked out to be. You paid your closing expenses, initial charges, stamp duty, deposits and different fees at the time you took out the loan. At this moment you want to save money, and you believe that refinancing your home is the wisest choice.

First, you must be told that banks look at self-employed equity loans in a different way than ordinary loans. The banks will need proof of income, which will imply accountant statements to establish the source of income. If you recently created your business, you will in all probability run into troubles if you have no proof of income. You could be asked to wait a certain length of time and accumulate evidence that steady income exists. Otherwise, if you do obtain a loan, you may pay higher interest rates than average, since the lender might view you a poor risk for lending equity.

The lender will consider the equity on your house, and if you have negative equity, the chances of establishing a loan will turn out to be more challenging. Thus, to reserve cash, you may want to consider other choices; or else, sit down and ask yourself what you intend to do by establishing a new loan against the equity on your home.

Self-employed equity loans in many instances include origination costs, premiums, pre-paid interest, arrangement costs, surveyor expenses and expenses, and so on. Thus, if you must apply for an equity Self-employed loan, shop around first and find out all you can about mortgages.

Finally, every business owner should be aware of self-employed equity loans, especially if your business will be growing soon. Investigating to find out the essentials about equity loans is indispensable in order to make your business lucrative, and your company will be much more stable to your consumers once your finances are in place.



Milton

November 5, 2009

Home Equity Loans – Advantages & Disadvantages

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — @ 3:11 am
Webmaster Home123 asked:


 

Home equity loans or lines of credit allows you to borrow money, using your home’s equity as collateral where equity is the difference between how much the home is worth and how much you owe on the mortgage. A home equity loan (or line of credit) is a second mortgage that lets you turn equity into cash, allowing you to spend it on home improvements, debt consolidation, college education or other expenses.

Advantages and Disadvantages of the home equity loans

Advantages: There are many other advantages of home equity loans. The loan payments on these loans are tax deductible. Home buyers can take bigger sum equity loans. These loans also carry a low rate of interest. But it’s best to heck the prevailing interest rates from many lenders and banks before you actually go in for a loan. It’s also important that the borrower check the credentials of the lenders before applying for a loan. They are many scam and con artists who can take away your home in lieu of giving you a home equity loan. The borrower also risks losing the home in case they default on the loan.

The two major advantages of borrowing with a home equity loan are lower interest rates and potential tax savings:

- The interest rate you will pay on the average home equity loan is generally lower than the interest rate you will pay on the average credit card or any other type of non-secured debt.

- For home equity loans, you can generally deduct the interest you pay. The interest you pay on credit cards and other types of personal loans is generally not tax-deductible.

Disadvantages:

Risk of losing home. If you can’t repay or refinance the loan, then you may be forced to sell or lose your home. Your home is the collateral for the loan. Being late or missing loan payments can trigger foreclosure within 60 to 90 days.

Rising interest rates. With a variable interest rate, most home loan rates change when the economy changes. This means your monthly payments can rise and fall. Be sure you know what the cap is on the loan’s interest rate. The cap sets how high your interest rate can increase each year as well as how much it can increase over the whole loan time period.

Fees. Lenders can charge a variety of fees including origination, application, and withdrawal fees. Be sure to ask about all possible fees.

The major disadvantage of a home equity loan is that you are using your house to get approved for the loan. For some people who have flawless credit this might not be a problem, because they can insure themselves that they will do whatever it takes to pay off their loan. However, instances have arisen where individuals have forgotten or were they are not financially able to pay for their loans. So at this point you’re wondering what happens if you cant pay your home equity loan? With all financial decisions come risk and the risk of losing your home wouldn’t be an option, especially if you have a family.

Home equity loans are best used for home improvements that will increase the value of your home. Some improvements, such as swimming pools, don’t usually increase the value upon resale. Others, such as additional bathrooms, living space, renovated or updated kitchens, etc., generally do increase the value of your home.

The bottom line is this: if your home is worth more than you owe on it, a home equity loan can be a great way to take advantage of this, but it can also get you into serious financial trouble, and should be used wisely. Why not use the equity in your home as part of your retirement fund instead of spending it on things that may not last?

Over the life of home loans – sometimes up to thirty years – your financial circumstances can change dramatically. Starting a family, changing jobs, children leaving home and many other factors can alter your financial circumstances over the term of the loan. A home loan that is right for you at the beginning has the potential to become the worse mistake you ever made.

Refinancing can be useful and financially rewarding but it can also carry risks. It takes time and costs money, so before you decide to change to another lender, ask yourself if it is really the right thing for you.

Are you happy with your existing lender? Have they been professional and helpful in all the dealings you’ve had with them? Are you happy with your existing loan? Is the interest rate comparable to other lenders? Could you use some extra features offered with other products?

Has your financial situation changed? Maybe you’ve started a new job or become unemployed.



George

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