Home Equity

Home Equity Loan Scams: Equity Stripping

For many people, home equity loans are quite useful. They allow them to make necessary home improvements and increase the value of their homes. Unfortunately, in addition to lenders who are interested in helping you and seeing you succeed, there are lenders who are merely interested in getting at the equity in your home. These lenders will try to appeal to your "desperate" side in order to pressure you into a home equity loan that you probably do not need.

One of the practices by unscrupulous lenders to get their hands on the equity in your home is called equity stripping. Equity is what remains between your home's market value and what you owe. As you make loan payments, the difference becomes larger, meaning that you keep more money after you sell the home to pay off your mortgage. Even people with lower incomes can have a good amount of equity built up in their homes, if they have been good about making their mortgage payments. These are exactly the kinds of people equity stripping scammers are looking for.

Here's how it works:

You have just enough to pay the bills. You want a little financial padding each month, just to have the breathing room. Enter the lender. The lender says that you can get a loan, and purposely steers you toward one with monthly payments that are probably too high for your income. While you may be approved for the loan based on current income and good credit, chances are the loan is a bit too high. The lender, trying to be "helpful" reports your income as higher than it is on the application so that you are approved. After a few months, when the loan money is spent, you find that you cannot make your home equity loan payments. The lender forecloses your home, and all of the equity you have built over the years is stripped from you.

No matter how bad things get, it is important to remember that your home is your most valuable asset, putting it on the line with a home equity loan that you cannot afford may result in the loss of your home. Make sure you understand the terms of a home equity loan, and avoid a lender that encourages you to be dishonest on a loan application, just so you can get the loan. Such lenders usually do not have your best interests at heart.

Go to http://www.homeequitywise.com for help finding a reputable Home Equity Loan Lender Online.

Home Equity News:

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Like many homeowners during the housing boom, Lynnette Madden and her husband decided to open a home equity line of credit about a year and a half ago as ...
Americans' home equity near a record low - Business - Real estate ...
WASHINGTON ? Falling U.S. home prices have shrunk equity so much that the proportion of their homes that Americans actually own is near its lowest point ...
Home equity lines have dried up across U.S. - Business - Personal ...
Home equity lines have dried up across U.S. As home prices collapse, banks cut off credit, further souring the economy Below:
Late payments for home equity loans rise - Business - Real estate ...
WASHINGTON ? Late payments on home equity loans climbed to a 1½-year high in the opening quarter of this year, while delinquencies on credit card bills ...
Retirees no longer count on home equity - Business - Personal ...
Many Americans have recently found themselves changing retirement plans after losing a substantial amount of home equity as the housing market and the ...
Equity in Americans? homes falls to historic low - Business ...
NEW YORK ? The equity Americans have in their most important asset ? their homes ? has dropped to its lowest level since the end of World War II ...
Students get creative to pay off loans - Business - Personal ...
Lines of credit typically work like a credit card, with a limit and a revolving balance: the average home-equity line of credit currently has an interest rate ...
Use of home equity hits a four-year low - Business - Real estate ...
Use of home equity hits a four-year low Freddie Mac report cites falling residence values, stricter lending standards Below:
Ford, Toyota are pinning their hopes on China - Business - Autos ...
NEW YORK ? Ford Motor Co. plans to build a new assembly plant in China ... $30K home equity loan FICO: 5.75%
Cities sue, invest to stop foreclosures - Business - Real estate ...
These stem from lost tax revenue and jobs as well as slower consumer spending that come with home equity declines, and don?t even include the financial toll ...

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