Thinking of taking out a home equity loan? Wondering if itís a smart idea?
We asked the Federal Trade Commission for help in what to watch out for.
We know: Tips on Home Equity Loans
Whatís a home equity loan?
When you borrow money and put up the equity in your house as collateral, itís called a home equity loan. These loans can be easier and larger than other loans you may be able to get, but they also put your home at risk.
What protection to I have against losing my home with a home equity loan?
The most important protection you have is to insure you get an honest lender and that you are capable of paying back the loan under the terms you agree to.
YOU HAVE 3 DAYS TO CANCEL A HOME EQUITY LOAN
You should know that a federal credit law gives you three days to reconsider a signed credit agreement and cancel the deal without penalty. Your "right to rescind" or "right to cancel" is guaranteed by the Truth In Lending Act.
You can rescind for any reason but only if you are using your principal residence-whether it is a condominium, mobile home, or house boatóas collateral, not a vacation or second home.
What should I be aware of before I take out a home equity loan?
Before you take out any loan, you should comparison shop.
For any loan you are considering, you should:
What are the particular things to watch out for with home equity loans?
Homeowners should always be careful when putting their homes on the line for a loan. There are a number of abusive or exploitive lenders targeting homeowners who are elderly, low income or have poor credit.
Protect yourself. Donít: