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Before using a home equity loan for any purpose, you should be aware of the pitfalls of these loans.
Understand that the home equity loan is secured by your home. Failure to make payments according to the agreement could result in foreclosure.
Beware of quickie home equity loans that are promised in days instead of the typical two-week time frame. Although these loans are legit, they cost more in higher interest rates. Unless you absolutely need the money in a week, be patient and save yourself some cash.
Even if you don't complete the loan transaction, you may still be responsible for the cost of the appraisal, credit report and any other fees incurred by the lender or broker.
Another common pitfall of home equity loans is that scammers have found plenty of ways to cheat homeowners out of their most valuable asset. Be sure that you know who you’re doing business with. If something smells fishy (like a high-pressure sales pitch or an inability to put things in writing), then take a step back and make sure the deal is legitimate.
Copyright © 2006 Loan Mortgage Broker Information. Send comments here.
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