Home Equity Scams to Avoid
Buying a home, just like any other transaction has the possiblity of attracting some nefarious swindlers who want to take your money and run. They can exist anywhere really, and can be as unassuming as your neighborhood groccer and as friendly as the town's gossip. These scam artists aren't concerned with your nationality, how many times you were late with the electric bill, or even if your child brought home a honor roll bumper sticker for your car. All they want to do is separate you from not only your hard earned money, but in some cases even your home. These are some of the home equity scams you may encounter as a real estate buyer.
Loan Flipping
In the beginning, this scam might seem like a godsend. You get a phone call from an excited lender who let's you know about a great but little know deal to refinace, but only if you act fast. Then, about six months later he contacts you again, with a even more tempting deal. The flip side to all this refinancing is that you will be adding extra monthly fees, interest payments and time to your mortgage debt. So you see, in times these wonderful deals aren't so great in the long run.
Insurance Packing
This scam is often used by dishonest financial institutions who add on such things as credit insurance or other products. These are things that homeowners rarely need. In addition, these products also don’t always protect you in times of real need. The lender will often try to get your compliance by telling you about a rare occurence in which the outlandish scenario actually came to pass. Before you think about taking on this extra debt, discover if the proposed scenario is likely to happen, or if it is simply a way for the mortgage broker to line his pockets.
Bait and Switch
If you're selling Westminster CO real estate, Longmont Colorado real estate, or anywhere else in the states, it's pretty similarThis scheme is often launched on first time home buyers, or older people. This scam starts with the buyer looking at a wonderful financing option, one that anyone would grab in a second. Then, at the time of closing, things begin to change, and change drastically. It can start out with little changes here and there, but pretty soon, the great deal you agreed to is nothing like the document that you about to sign. The potential homeowner is then strongly pressured into agreeing to the new deal, something that can be ill afforded, and doesn't provide what they need. The schemes presented here are the most popular, but by no means are the only ones you'll come across while buying a new home.. The best protection against these types of scams and the people that practice them is to stay viligent, informed and aware.e}