|
The Practices:
Equity
Stripping
The
Balloon Payment
Loan
Flipping
The
"Home Improvement" Loan
Credit Insurance Packing
Mortgage Servicing Abuses
Signing Over Your Deed
Do's and
Don'ts
More Info
Home
| |
Loan Flipping
Suppose you've had your mortgage for years. The interest rate is low and
the monthly payments fit nicely into your budget, but you could use some extra
money. A lender calls to talk about refinancing, and using the availability of
extra cash as bait, claims it's time the equity in your home started
"working" for you. You agree to refinance your loan. After you've made
a few payments on the loan, the lender calls to offer you a bigger loan for,
say, a vacation. If you accept the offer, the lender refinances your original
loan and then lends you additional money. In this practice-often called
"flipping"-the lender charges you high points and fees each time you
refinance, and may increase your interest rate as well. If the loan has a
prepayment penalty, you will have to pay that penalty each time you take out a
new loan.
You now have some extra money and a lot more debt, stretched out over a
longer time. The extra cash you receive may be less than the additional costs
and fees you were charged for the refinancing. And what's worse, you are now
paying interest on those extra fees charged in each refinancing. Long story
short? With each refinancing, you've increased your debt and probably are paying
a very high price for some extra cash. After a while, if you get in over your
head and can't pay, you could lose your home.
The
"Home Improvement" Loan
| |
| ;HomeEquityScamsFraud
Home Equity Scams & Fraud:
Do's and Don'ts
|
Does your kid's
school need money? Do you fundraise? Check out::
FundraisingMom.com
"All
you need is a website and you can raise thousands in your
sleep!" |
|
meEguaaomeEq
|