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Avoid Home Loan Scams

By
Real Estate Agent with Keller Williams Realty

Sometimes homeowners have contractors coming to their front door seeking work that will improve their property.  The types of projects may include roof replacement, trimming trees, or remodeling your kitchen, etc.  Let's say you are interested, but unable to afford the project.  The contractor states he can arrange financing with a lender.  At this point beware, do not sign a contract immediately that allows the contractor to begin work, or agree to terms with the lender.  If you do not have the immediate cash for the improvement, interview multiple lenders to insure you are getting a similar story and interest rate before signing on with a lender and contractor.  If these steps are not followed and you sign on with the contractor and his lender immediately, you may experience some of the following problems:  poor workmanship, job not being completed on time, contractor has been paid by lender, therefore, no incentive for the contractor to complete the job and/or may discover you are paying a high interest rate.  Over and above the prior example and potential problems, here are a few other things a homeowner should not do:

•  Do not agree to a home equity loan if you cannot meet pay your home equity loan and mortgage payments.

•  Before signing any documents, be sure to read the document and insure all blank spaces have been filled in.

•  Never deed your property to anyone, unless you have consulted an attorney.

•  Never allow anyone to pressure you to sign any document.    

Comments (1)

Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

Great piece of advise. You should always read something before you sign it and always follow that golden rule, "if it sounds too good to be true, it probably is".

Aug 20, 2010 10:53 AM