What is a Home Equity Loan?

A home equity loan is also known as a second mortgage or it can be seen as borrowing from the money your home has accumulated in value or equity. This type of loan allows you to take advantage of your home's built-up equity. Equity is the difference between the value of your home or what it could be sold for and the amount that you currently owe on it. Homeowners regularly use a home-equity loan to pay off credit cards, home improvements, for a new car, or their child's college education.

Are you interested in applying for a home equity loan?  If so, contact a lender in your area today.

A home-equity loan is a good way to borrow money for two main reasons:

• The interest rate is usually one of the lowest loan rates a borrower can get
• The interest you pay on the loan is usually tax-deductible

You receive a home equity loan in one lump sum and that is paid off over a certain amount of time, usually with a fixed interest rate and payments broken up by month. These payments can be used for a number of different reasons including medical bills, debt consolidation, and home repairs.  Are your ready for a home equity loan?

Are you interested in applying for a home equity loan?  If so, contact a lender in your area today.

Home Equity Loans In Missouri

For many Missourians, home equity is one of their primary financial assets. Scam operators are all too aware of this and are willing to do whatever it takes to steal this equity.

Techniques used in home equity schemes vary but they typically involve the same key features. The first step is for the con artist to get the owner to sign a first, second or third mortgage.

Frequently this isn't difficult because all that's required is the home owner's signature. The loan documents, including the mortgage, are written in fine print and many home owners have no idea what they're signing.

The loan's terms are usually incredibly unfavorable to the consumer, with enormous up-front costs and high interest rates (sometimes exceeding 50 percent). They frequently are coupled with a balloon payment a few years down the road.

With a loan like this the unscrupulous lender can't lose. If the consumer pays off the note, the creditor makes a tremendous profit. If the consumer defaults, the lender forecloses and immediately recoups the loan amount plus points and fees paid up front, and gains the opportunity to buy the home at a fraction of its real value.

How to spot home equity loan fraud

• Be wary of any business that actively solicits you, particularly if the firm already seems to be aware of your financial plight.
• Watch out for businesses that say they're not concerned with your ability to repay the loan. The ads may say "No income or credit check. If you have equity, we'll guarantee the loan." These catch phrases may be a tip-off to an unfair scheme.
• Look for discrepancies between the promised or stated interest rate and the annual percentage rate (APR) figure required in all consumer loan contracts (Truth in Lending). If that figure is significantly higher than the rate stated in the contract, the loan contains hidden interest charges.
• Determine who the lender is. A lender could be nothing more than a few individuals in for a quick score. Does the agent have an office? Is the company an old and established one with community ties?

How to avoid home equity loan scams

• Have a financial adviser such as an attorney or accountant review all papers before signing anything. Paperwork for a loan contract is often technical and unclear.
• Try first to resolve the matter directly with the original creditors if you need cash to pay off creditors. Most creditors are more interested in negotiating an affordable repayment schedule than in taking expensive legal action.
• Don't assume you will be denied a traditional (non-mortgage) loan. Apply first and find out.