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Informative Articles

FHA 101
What is FHA FHA or Federal Housing Administration is a branch of HUD or Housing and Urban Development that works through local mortgage lending agencies to give Federal mortgage and loan insurance for those who wish to own a home or do home...

Home Equity Loan Refinancing
If you have lived in your home for more than two years, it has probably appreciated which means that you have built up equity. What is home equity? Home equity is the difference between the value of your home and the amount of all that you owe on...

Mortgage Leads, Choosing the Best Option
When it comes to buying mortgage leads, there are many good companies out there for you to research, and many avenues to travel down when considering which lead type will work best for you. While working as a loan officer, I dealt with my fair...

Obtaining a Mortgage On-line
A mortgage for first time home buyers or people who are looking to refinance their homes has become much easier in later years' thanks to the internet and the ability to obtain a mortgage on-line. Of course there is your local bank, where...

Things To Consider Before Buying a Condo Hotel or Resort Residence
Resort home ownership, such as condo hotels and fractional shares is different from typical home ownership. So it is important to ask certain questions before signing the purchase agreement on a resort property. The following list of questions...

 
How To Spot And Avoid Equity Scams

Most lenders on the equity loan marketplace are legitimate lenders; however, a few lenders are taking the less fortunate for a ride. These unscrupulus lenders offer appealing loans, yet fail to tell the borrower about hidden charges or "balloon" charges. Hidden charges are often stripped from loans, since the APR is a supposed security to borrower that weeds out hidden fees.

"Equity Stripping" is one of the leading scams on the loan marketplace. The lenders engaging in "equity stripping" will often present to borrowers (too good to be real) deals, leading them to believe that they are saving money. Thus, once the borrower agrees to the contract, the lender will pose new charges, high interest, and other fees that puts weight on the borrower, until he or she breaks and fails to make payments on the mortgage. The lender then repossesses the home, selling the house for profit while the borrower is standing on the corner, wondering where he will live next.

Thus, the Federal Government has provided information to help borrowers avoid losing. Since equity stripping is becoming a huge industry, the Fed's advise homeowners to watch out for equity stripping, including paying attention to lenders that are offering loans that reach above your wages.

The feds also advise borrowers to stay alert to "loan flipping," which is the process of switching loans regularly and requesting larger amounts of cash on each refinance applied. If a lender is pressuring you to sign an agreement, you will need to find another lender, since pressuring borrowers is a surefire tip that the lender is out to take you for a ride. You will also want to consider PMI, which is personal mortgage insurance, which is a requirement; however, few lenders attempt to charge for additional coverage that is not needed. Thus, homeowners, especially the less fortunate, should adhere to advice and read details of any loan offered thoroughly.

About the author:

Emanuele Allenti is the owner of http://www.incredible-equity-loans-for-you.info and http://www.incredible-equity-loans-grabber.info websites.

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