Tag Archives: Avoid

How to Avoid Second Mortgage Home Loan Scams

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Second mortgage home loan scams are especially prevalent during housing booms when equity is growing at a record pace and homeowners regularly refinance or take out home equity loans or home equity lines of credit. Although most reputable lenders return to reasonable loans when a housing boom ends, predatory lenders are still out there. If you’re looking for a second mortgage, watch out for these scams.

Popular Second Mortgage Home Loan Scams

Scammers create new tricks every day, but these are the most common tactics you’ll encounter and tips to avoid them.

Loan Flipping

Once your second mortgage loan is complete, a disreputable lender will encourage you to repeatedly refinance your loan each time a lower rate is available. Each refinancing comes with hefty fees that erase your potential savings. Tip: Always determine the potential costs and savings before refinancing. Don’t let a lender pressure you into refinancing in order to get a great deal that will vanish tomorrow.

Abusive Loan Servicing

Some predatory lenders don’t strike until the loan is closed. Once the loan is complete, you receive letters from the lender claiming you owe additional taxes or fees that you paid directly. They may also charge late fees even though your payments are on time. Tip: If you’re being asked to pay something you don’t owe, send the lender a letter with proof of payment.

Insurance Packing

Your lender encourages you to buy additional voluntary credit insurance and bundle it into your second mortgage payments. Tip: Don’t accept this insurance with the loan. If you’re interested in it, buy it separately.

Altering Loan Documents After the Fact

The FTC has charged several predatory lenders with fraudulently changing loan documents after the fact. Tip: Never sign documents you haven’t read or sign them under pressure. If there is a blank space, draw a line through it and initial it. Always get a copy of all loan documents you signed before leaving the office.

Deceptive Home Improvement Loan

A contractor may knock on your door and offer to do home repairs. To help you pay for it, he’ll even arrange the financing. The financing is usually a high-interest home equity loan with poor terms, but the contractor threatens to stop the work if you don’t sign. Once you sign, the contractor fails to complete the project or the work is shoddy. Tip: Before deciding to do home repairs, interview several contractors, review estimates and references, and arrange the financing yourself.

Demanding Your Deed

Default filings are public records. If you receive calls from lenders following a notice of default, be very cautious. Scammers will offer to save you from foreclosure with a new loan, but demand you sign the deed over to them before the financing is arranged. The “lender” can evict you, sell your house, or borrow against it, leaving you without a home. Tip: If you receive a notice of default, contact your lender about refinancing or contact alternative lenders after careful research.

Equity Stripping

If you’ve experienced financial difficulties, but have built up substantial equity, the predatory lender encourages you to lie about your income on the second mortgage application in order to qualify for a larger loan than you can afford to pay. Once you default, the lender forecloses, leaving you with nothing, but they can sell your house and earn a profit. Tip: Never borrow more than you afford to repay and never lie on a loan application.

What to Do if You’ve Been A Victim of a Scam If you’ve fallen victim to one of these home loan scams, you can get help before you lose your home.

If your loan has additional insurance included in it, try to cancel it. If interest rates are lower, it may be worthwhile to refinance to a new second mortgage without the insurance.

If your contractor fails to complete the work or completes it poorly, report him to your state’s contractor licensing agency. You may also be able to sue him. Contact a reputable lender to refinance the high-interest loan.

For all other scams, first contact a lawyer to determine your rights and recourse. Second, file a complaint with Consumer Protection Bureau of the FTC. Although the FTC doesn’t resolve individual complaints, they can take action if a record of abuse can be proven.

For more articles and suggestions, visit http://www.bills.com/second-mortgage/

Justin narin has 5 years experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com

Use a Mortgage Calculator to Avoid Taking Out What You Cannot Afford

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Financing your home is an important decision, one that should be given a lot of consideration and be approached diligently. The diversity of home equity loans available on the market today provides consumers with numerous options to get a hold of the cash that they need for various purposes. Homeowners should consider mortgage loans for a variety of reasons. With the boom in the real estate market and the rising value of properties, home equity financing emerges as an excellent opportunity. Moreover, with the possibility to reduce taxes by claiming the interest on your credit as deduction, home equity financing is among the consumer’s smartest choices. What’s more, this type of financing comes with lower interest rates as compared to other loans, which translates into lower monthly payments.

The process of taking out a mortgage loan can be very complex and time-consuming. Applying for your first mortgage may seem quite easy, as the process of selling and purchasing homes is a daily occurrence. However, it is very important that you be able to make informed decisions when it comes to applying for a home mortgage. A careful and diligent approach of the process is all the more important when it comes to refinancing your existing mortgage. It goes without saying that every homeowner who is faced with the need to refinance his or her existing mortgage is also interested in avoiding overpayments for the financing. No one wants to pay too much in lender fees and interest rates, especially when they’re dealing with mortgage refinancing, which undoubtedly means higher monthly payments. You should know that there can be many fees disguised in closing costs that have to be paid by the borrower as security to his or her mortgage. Therefore, focusing on interest rates alone without giving any thought to additional fees is not a good idea. Furthermore, comparing mortgage offers or using mortgage leads, which are available online, is a very good way to identify excessive and unnecessary lender fees and make the best choice of mortgage loan.

More and more people are applying for mortgage loans to a variety of lenders. With loan requirements being less and less strict, there is an increasing number of consumers who benefit from this type of loan. Unfortunately, many such mortgage loans end in foreclosure, as homeowners fail to stay up to date with their payments for a variety of reasons. While there are many circumstances that can lead to inability to make the necessary monthly payments, there are also numerous situations when borrowers realize that they cannot afford interests and monthly payments that are too high, but fail to do so prior to taking out the mortgage loan. You should acknowledge the fact that it is your responsibility to determine firsthand whether or not you can afford that mortgage in order to avoid a very unpleasant situation, such as foreclosure, which can have disastrous effects. A mortgage calculator is a very useful tool in this respect.

A mortgage calculator provides you with valuable information on your mortgage and all the aspects that it encompasses. Information on your monthly payments and amortization tables can be obtained with the help of a good mortgage calculator. You can use a mortgage calculator to figure out the exact payment amounts and the interest that you will have to pay over time. Using a mortgage calculator is all the more recommended when consumers are interested in refinancing their mortgage. A mortgage calculator can help you figure out whether or not you can afford to take out that second mortgage, and helps you avoid taking out more than you can pay for.

The Internet is a good source of mortgage calculators, some of which are actually free. Remember that mortgage loans should be a financial advantage to you, and not a means of getting into financial trouble. With comprehensive information on your mortgage options and the help of a good mortgage calculator you can rest assured that you’ll make a good choice of loan.

For more resources about mortgage or even about mortgage calculator please review this webpage http://bestmortgage.findtipshere.com

For more resources about mortgage or even about mortgage calculator please review this webpage http://bestmortgage.findtipshere.com

Buying a Home – Three Mistakes to Avoid

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Buying a home is often a stressful process, because it is usually the single largest purchase of your life. Even if it isn’t your first house, it’s easy to make a mistake that costs you hundreds or thousands of dollars. Here are three common mistakes to avoid.

1. Paying Too Much

This isn’t about over-paying for a particular home. That mistake is tough to make if you will be borrowing to buy. An appraisal will be done, and the lender will probably refuse to lend enough for you to buy an over-priced house.

The common mistake here is following the advice of real estate agents, lenders and even your friends and family, who will often encourage you to buy a more expensive home than you can afford. They may call it an “investment” and claim that real estate always goes up in value, so you should get as much as you can. Of course, recent history shows that home values don’t always go up, and this kind of thinking has a lot of families facing foreclosure now.

Buy what you feel comfortable with. If you can’t easily make the payments, even after a short layoff from work, you may be overextending yourself. And watch out for lenders “solutions” to this problem (see number 2).

2. Trusting Lenders

I am not suggesting that lenders are all out to get you, or that you should look at them suspiciously, but they are not necessarily looking out for your best interest. That’s your job. Their’s is to sell loans. Buying a home normally requires buying a loan too, and as we can see now (2008), many loans are not suitable if you want a secure future. While there are sometimes good reasons for interest-only, adjustable-rate, and zero-down loans, most of the time these should be avoided.

Never mind what a lender recommends or suggests. Ask him only for facts, and do your own math. If the rate on your loan goes from 5% to 10%, what will the payments be? Can you easily afford that? If not, you are taking a risk that may not be justified.

3. Trusting Real Estate Agents

When you are buying a home, the real estate agent who helps you, like the lender, has his own agenda. It isn’t that he or she doesn’t wish you the best, but they wish even more for their own families, so the primary goals is to sell something. Also, unless the agent is explicitly working for you, she has a fiduciary responsibility to work against you if that is what is best for the seller. In other words, if she thinks you will pay more because of a comment you make, she must pass that information on to the home owner.

Even a buyer’s agent can be biased. It is nice to think that they are working for you, but they still only get paid (typically) when a sale is made. That’s a pretty motivation to push you into a home fast, whether or not it’s the best one for you.

Pay attention to whether an agent is really showing you the houses that suit your needs, rather than the ones that he or she would buy. Many real estate agents don’t listen very well, and will show you what they think you want, rather than asking you more questions. They can lead you to buy a house that doesn’t suit your needs or costs more than you want.

One final note about real estate agents: They are not experts on all things. In fact, some are barely an expert on anything. I have met agents who didn’t understand a simple seller-financing offer, and others who suggested that cracks in foundations were “no big deal,” though they knew nothing about construction. Unless an agent has specific experience in an area, take what they say with a grain of salt, and seek out other counsel.

Buying a home that actually is right for you starts with avoiding the three mistakes above.

Copyright Steve Gillman. To see a photo of the house we bought for $17,500, get a free ebook on Buying A Home For Less, and a free real estate investing course, visit: http://www.HousesUnderFiftyThousand.com

How To Avoid The Most Common Mistakes Made When Buying A Home

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Buying a home is one of the most important and significant financial decisions that most people ever make. And because of the large sums of money that are involved, there are definite pitfalls and problems that you want to do your best to avoid as you make your decision.

One of the most common mistakes that many home buyers make is not getting pre-approved or pre-qualified for their mortgage loan in advance of starting their home shopping. As a result, if they put in an offer on a home at the same time that another prospective buyer makes an offer, and that buyer has been pre-qualified, the other buyer will almost always get the house because of having their financial arrangements already in order. So avoid this mistake by arranging for your mortgage loan in advance.

Another common mistake that is made is not enlisting the help of a qualified realtor in the home buying process. Buying a home these days is becoming more and more complex and involved. So having your own realtor who is looking out for your best interests and is knowledgeable about all the real estate requirements for your area can save a lot of headache and hassle.

Sometimes home buyers also rush into buying a home too soon. So its very important to take your time in the buying process, and not allow yourself to feel as if you are under pressure to buy a particular home quickly. New homes go on the market all the time, so be patient and you’ll be able to find a home you want, at the price you want, soon enough.

The opposite of that scenario can also be a big mistake. There are some home buyers who have such stringent requirements for their dream home, that they often pass up excellent homes that are very good bargains simply because their demands are unreasonably high. In a rising market, this can often cost them very dearly in the process. So although you may have very definite ideas about a home you would like to purchase, try to realize that some small compromises are usually necessary when buying a new home.

Sometimes home buyers get carried away emotionally and become attached to a home that is actually out of their price range too, and then saddle themselves with a huge debt that is difficult for them to pay. Most often financial institutions will help try to prevent such a situation, but buying restraint needs to start with the home buyer first. A good practice is never to even look at a home that falls outside of your affordable price range to begin with.

Whenever you are seriously looking at any home, be sure to inspect it thoroughly before you agree to the sale and sign the papers. It’s usually best to hire a quality home inspector on your own to go through the property and give you an unbiased assessment of its condition. If major problems are found, it can save you a lot of money by making this small investment.

One other common mistake that you want to avoid is not being aware of all restrictions that may be placed on your property by local zoning laws or homeowners associations. You may have specific plans for improving your property after the purchase, but you need to make sure that there are no restrictions on the plans that you have in mind before you buy.

These are some of the more common mistakes that homebuyers have made in the past that you can learn from. So before you buy your next home, review this list of tips and ideas to help make your home buying experience a successful one.

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