Home Equity Loan Scams - Watch Out For These Red Flags
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Home Equity Loan Scams: Don't Fall for These Traps!
Overview
Your home is likely your most valuable asset, and it’s crucial to safeguard both your property and its equity. Equity represents the difference between your home's market value and the amount you owe on your mortgage. For instance, if your home is valued at $200,000 and you owe $150,000, you have $50,000 in equity.Common Scams
Equity Grabbing
One prevalent scam involves "equity grabbing." Scammers may entice homeowners to cash out their equity for a lump sum at settlement. While receiving a large check might seem appealing, it can lead to unaffordable monthly payments, risking the loss of your home.Contractor Scams
Another form of equity grabbing can be initiated by unscrupulous contractors. They might propose home improvement projects at seemingly attractive prices. If you express financial constraints, they might direct you to a lender they’re connected with for a home improvement loan. Often, these loans have low initial payments that later balloon to unaffordable amounts. Always read the fine print and avoid signing documents that could be altered later.Protect Yourself
3-Day Right of Rescission
Borrowers have a Right of Rescission, allowing you to cancel a refinance loan on your primary residence for up to three days after closure (excluding Sundays). Don’t hesitate to exercise this right if something seems amiss.By staying vigilant and informed, you can protect your home and its equity from these deceptive practices.
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