You can learn a lot about getting a home equity loan by doing research on the internet. It can also be a great place to find a reputable mortgage broker, as long as you are careful not to fall for an online home equity loan scam.
Watch out for loans with bad credit.
When a lender offers you a loan with a very high interest rate and a lot of fees, this is called subprime lending. Most of the time, these loans are given to high-risk people who need money so badly that they don't look around for a company that will work with them even though they have bad credit.
Watch out for stripping equity.
Equity stripping is when you get a loan based only on the value of your home and not on how much you can pay back. Most of the time, the person who takes out these loans can't pay them back, and the lender ends up with the home and all the equity in it.
Watch out for loan sharks.
Predatory lenders make a lot of money by setting up loans so that the borrower is sure to miss payments and lose his home. You might be dealing with a predatory lender if the broker asks you to lie on the loan application, apply for a bigger loan than you need, or sign blank loan papers with the promise that they will be filled out later. You should also stay away from lenders who tell you one thing when you apply but change the terms when it's time to sign or won't give you copies of the forms after you've signed. Most of the time, predatory lenders lie about the type of credit they are giving you and don't give you the required loan disclosures.
You can apply for a home equity loan online for a number of reasons. The process is quick, easy, and convenient, as long as you are careful to stay away from brokers who aren't honest.
