Click Here
House keys and a $1 bill in the background
home equity
Chapter 4: Watch out!

Understand risky loans before you agree to one. And watch out for these common loan scams.

This chapter deals with common but risky types of loans, such as balloon loans and high loan-to-value loans. They're perfectly legal, but dangerous if you don't know the consequences. The rest of the chapter covers loan scams and what you can do about them. Did you know the Truth in Lending Act provides a right to cancel certain real estate loans? Read about it here.

What you can expect to learn from this chapter:
  • Balloon loan pitfalls
    Beginning with an explanation of amortization, the concept of a balloon loan is delineated.
  • Risks of high LTV loans
    High loan-to-value loans could lead you to owe more money than your house is worth.
  • Scam artists
    Equity stripping, loan flipping and a dozen other schemes you need to be wary of. Plus, a list of things you must always do when taking out a loan.
  • Rights of rescission
    The Truth in Lending Act gives you the right to cancel certain real estate loans within three business days. That's the right of rescission.
  • Dealing with fraud
    If you've been a victim of fraud, you'll find all the phone numbers and Web sites here to help you with the problem.

 

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
HOME EQUITY STRATEGIES & ADVICE NEWSLETTER

Advice for homeowners looking for options to use their home’s equity wisely. Delivered monthly.

advertisement

Ask Dr. Don

Tap HELOC to cover college costs?

Dear Dr. Don, I have a home equity line of credit, or HELOC, for $110,000 that expires in September 2016. I do not have a mortgage. I won't need to use the home equity line until 2015 when my children head to college. I'd... Read more

Partner Center
advertisement

Connect with us