Bad Credit Home Equity Loan

Fortunately most lenders are pillars of their communities and can be trusted. Unfortunately there are a few lenders who prey on the elderly, the poor, and those in financial trouble with bad credit. These unscrupulous lenders deliberately target weak borrowers with the hopes they get further in trouble and end up losing their home for financial gain.

Like any industry that is capital intensive with money flowing like wine there are a few bad apples in the barrel. There are lots of new brokers out there and some brokers are looking for get rich quick schemes. Real Estate market has been hot and will be again. When things slow down some brokers get overly aggressive and promise things they cannot deliver.

National Association of Mortgage Brokers (NAMB) says as many as 30% of brokers are questionable.

Everyone should be made aware of some tactics used to exploit particularly weak borrowers or borrowers in financial trouble. Here are some examples.

Hidden Balloon Payment Nearly everyone has seen the ads for a high dollar amount loan for a ridiculously low monthly payment. What some lenders will do is forget to tell you that the payments are interest only and at the end of the term of the loan a huge balloon payment is due. If you can't refinance or pay the loan off you may lose your home.

Flipping Loans This is the practice of luring a borrower into repeated home equity loan refinancing over a period of time. Each time the rate goes up and points and other closing costs are rolled into the loan making the net proceeds lower than expected and the payments higher than expected.

"Home Improvement" Loan A contractor offers to do some much needed work on your house but you tell him you can't afford it. He offers to get financing thru a lender he has done business with before. The work on the house starts. Then you are asked to hurry and sign some papers for the loan. You realize the loan is a home equity loan and the rate is very high so you hesitate to sign. The contractor says he will not do any more work unless you sign. The contractor already has a lien on your property.

Bait and Switch Tactics This is the practice of getting to within a critical time of closing the home equity loan and finding out the terms are different from those agreed to. The unscrupulous lender is hoping that he has the borrower in a position that he must accept the terms.

No matter what your situation borrowers are well advised to follow common sense when picking a mortgage broker. There is a lot at stake. Don't press the "EASY" button.

Jack Krohn is a leading free lance writer on Home Equity and Mortgage issues with over 35 articles to his credit. He is also the #1 author of Home Security Articles in the country.

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Bad Credit Secured Loans - ensure loan without any credit fears

Bad credit is not at all considered a hurdle in taking a loan especially if the borrower is willing to offer some security to the lender. Bad credit secured loans are especially designed loans for people having credit problems like late payments, arrears, payment defaults or county court judgments against their name.

Main reason for lender approving bad credit secured loans is that the lenders have a valuable property like home of the borrower as collateral. On taking the property as security, lenders cut his risks to nil. In case of payment default, the lender can sell the property for recovering the loan amount. it can be said that bad credit secured loans are the best suited options for a bad credit person. Through bad credit secured loans, the borrower can also improve his credit score as he or she pays off the loan installments in time.

As bad credit secured loans you would be approved an amount that is below equity in your property offered as collateral. So make sure to borrower a lower than equity amount for fast approval of bad credit secured loans. One advantage is that you can choose to repay bad credit secured loans in larger repayment duration that ranges from 5 to 25 years. So you can reduce the monthly payments for the loan installments if larger repayment duration is the choice. As far as interest rate is concerned, since you have offered property as security, you are most likely to be approved bad credit secured loans at lower interest rate if your current repaying capacity is sufficient.

Compare different lenders offering bad credit secured loans for availing the loan at comparatively lower interest rate. Check your credit score before approaching a lender. Make sure to pay off the loan installments regularly so that your credit score improves.

About the Author

Carmen Cortez is a specialist advisor of every type of business loan and currently working as financial consultant in Bad Credit Loans Information. For further details of bad credit personal loans, bad credit secured loans, bad credit unsecured loans visit www.badcreditloansinformation.com

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