Beware Of These 2 Mortgage Scams

Scams are nothing new, but, there are plenty of second mortgage loans and scams that appear to be very genuine. Unfortunately, in the world we live in, scammers are around every corner waiting to take advantage. The worst part is that most of the scams appear very genuine and that unless you’re aware of them, you could fall into the trap. When taking out second mortgage loans, you’re at risk of being scammed, but that’s the unfortunate world we live in today. So, here are two mortgage scams you must be aware of. More details!

The Foreclosure Mortgage Scam

Foreclosure is never something you want to be faced with, but you never know what’s around the corner. Falling behind on your mortgage payments is very easy to do and after so long, the bank will start to take action. Unfortunately, scammers look out for properties in foreclosure and about to enter into foreclosure. What the scammers do is ‘offer’ a loan which will allow them to save their foreclosed home. However, the homeowners must transfer the ownership of the home over to the con artist. Homeowners will make payments believing their property is safe when in reality the scammer has taken the money and scarpered into the night! Even with second mortgage loans there is a risk of foreclosing so you need to know about the scam.

The Classic Bait And Switch Scam

You look for a loan, whether its second mortgage loans or another and a lender offers a deal that looks fantastic. The lender offers an extremely low rate and it looks genuine enough so you sign the contract; within a matter of a few days, possibly weeks, the lender comes back to you and says they can’t offer the original rate and ups the price. You’ve been reeled in with the promise of a low rate and once you’ve signed on the dotted line, you’re on the hook for a higher rate. It happens more often than you think and it’s the classic bait and switch scam that happens most days.

Always Check On the Lender and the Small Print

A lender looks legit, but you can’t be sure. You have to do your homework essentially to ensure you aren’t being scammed. Of course, it’s not something you want to do or should have to but it’s the world we live in! Scammers are waiting to take your money so you have to be extra careful. Also, take careful note of the small print of any loan agreement or contract. More often than not you get caught out with the small print and that’s something you have to be wary over. You can look at second mortgage loans but before you sign ensure you read the small print in full. It’ll cover your back more than you realize. Click here for more information: https://ezinearticles.com/?Be-Aware-of-Foreclosure-Scams&id=440425

Don’t Be a Victim of a Scammer

Being scammed or conned is easy! Anyone with a plausible story can reel you in! The smartest people get sucked into a scammer’s web of lies; and even when you think you’ve done enough to cover your back, it’s not good enough. The trouble is that scammers are smart and believe those in a desperate situation will hand over their money without thinking twice. It happens, but that is why you have to put a stop to it. You have to be smarter and be brave enough to walk away from a deal you aren’t certain over. You may be looking for second mortgage loans but if you smell a rat, it’s time to walk.

How to Use Your Houses Second Mortgage to Buy a Business

 

One of the main advantages of owning a home is to have equity. You can use the capital in your home to buy a business. This can be done by taking out a second mortgage. A second mortgage loan is also known as a home equity loan or HELOC (home equity line of credit). Find out what type of loan will help you reach your financial purposes.

  1. Find out How Much the Business Will Cost

You should know how much the business is selling. Then, an evaluation must be done to see if the business is gainful and whether this is a good price. An audit can be required to ensure everything is in order. You may need to put together a team in which includes an accountant, a lawyer, and your bank representative to make sure everything is in order. This is considered an acquisition team according to Entrepreneur.com. Confirm there is an adequate cash flow and that the business has a future perspective. If everything is fine, you must prepare to make your purchase according to what the business is valued.

  1. Determine How Much Equity Is in Your Home

The amount of capital in your home will determine whether you can buy the business. Take the fair market value of your house as well as subtract the outstanding balances owed. For instance, if your home has a value of $ 100,000 and you owe $ 40,000 in equity, your house is $ 60,000. You can use $ 60,000 to purchase the business. Several lenders will lend you just a percentage of fair market value, for example, 70% or 80%. If your lender will lend you 80% of the fair market value, then you can only borrow $ 40,000 ($ 100,000 x .80 = $ 80,000 – $ 40,000).

  1. Go See Your Lender

When you visit your bank where you have your second mortgage, the cashier can transfer the money directly to your checking account. Then you can issue a personal check to the owner of the company for purchase. Find out who the check should be paid for. The other option is to request a cashier’s check whether the seller of the company prefers this payment method. The amount you use for the purchase can reduce the capital in your home by the same amount.

  1. Finalize the Deal

Make sure that you have all the papers prepared, as well as legal documents. Your procurement team may require attending the closing or signing to ensure that everything is legitimately completed. You want to ensure that the property is transferred to you as it should.

  1. Do Not Rush to Make the Purchase

Give your acquisition team the opportunity to do your business evaluation. When the business fails, you can lose your money. Your house will be at risk of foreclosure if you can’t make the payments on the HELOC.

Be sure you know what your payments will be in the home equity line of credit. The rate is generally variable that means the rate could rise at some point in the future. An increase in the rate can cause your payments to enhance.

see more: https://en.wikipedia.org/wiki/Second_mortgage

Differences between a Home Equity Loan and Second Mortgage

There are thousands of people searching for second mortgage loans simply because they think it will help free up cash they have tied up within their homes. However, there is a stigma attached to second mortgages and some often believe it means a second mortgage signals there is something wrong with the home owner’s finances. That isn’t always the case and there are a thousand and one reasons to choose a second mortgage. However, many home owners get confused over whether they need a second mortgage loan or a home equity loan. What are the differences between the two?

What you’re Borrowing Against

With a second mortgage you are going to borrow the loan against the home and that if you fail to repay the loan, the lender can force a foreclosure to regain their money. A home equity loan is a mortgage which is against the value of the equity within the home. Again, if you fail to repay the loan, the lender can force a foreclosure to recoup their money. However, with a home equity loan, the first or primary mortgage on the home is technically the main priority for the homeowner. Second mortgage loans really don’t have that stance. No matter which type of loan you choose, you still have to make the repayments.

Second Mortgages Have Time Limits for Payment

Usually, with second mortgage loans lenders will set out a specific payment term for the loan. For instance, if you choose to borrow ten thousand dollars, the lender might specify you have to repay the loan by the following three years. Again, the terms of the loan will vary from lender to lender and of course, the amount of money in which you wish to borrow. Home equity loans will also set out payment terms but they can be slightly different to what a second mortgage loan is.

Which Loan Do You Need?

It comes down to what you feel is best for the home and what you believe is going to help free up the finances of the home. If you believe the home equity loan can work to your advantage, which might be the one for you. However, second mortgage loans are often a fantastic loan no matter what value your home has. Yes, you are borrowing against the home and you essentially use the home as collateral but it can be a great solution for most homeowners that plan to spend the next twenty years in the home.

Choose Wisely

When it comes the time to choose between a home equity loan and a second mortgage, you have two great options. They can in fact both help you with your finances without having to sell the home in order to see some equity from it. However, it’s an important decision you have to think very carefully about. You want to ensure you don’t make a terrible mistake by choosing a loan that doesn’t work for your personal circumstances. It’s important to choose carefully so that you can get the right value for money. Second mortgage loans are fantastic but it is worth investing more.

How to Find Loans without Guarantors?

Choosing loans without guarantors can be ideal for most individuals. Borrowers might want to borrow money but they don’t want to obligate someone else on their loan. What is more, most borrowers want to keep the fact they are borrowing money a secret (or to themselves) and having a guarantor can broadcast their business. However, there are ways to get loans without the need of a guarantor and those loans can be fantastic for most individuals. So, how to find loans without guarantors today?

Go To Your Current Bank

Most banks will offer their customers some sort of loan, and even if your credit isn’t the best, a bank may still be able to offer a loan. If you have been with your current bank for a number of years then you might find they are able to offer loans without guarantors and that can be a very useful solution. Of course, some banks, depending on your history with them might not be able to offer these loans but its well worth a try. It doesn’t matter if you want to borrow big or small, you should always try your bank first. Talking to a financial manager there or a teller and explaining the type of loan you need, can really help get the ball rolling.

Look Online and Compare Loans

While you don’t have to choose an online lender, you can find getting to know more about the loans available today to be a great advantage. You shouldn’t be afraid to go online and look for loans there as well as compare them to what you are getting with your bank. Comparing loans online can help you find the best deal and ensure you are getting value for money. At the end of the day, you want a good loan rather than a bad one because a bad loan usually ends up costing you far more. Loans without guarantors can be found online and you can get a better idea of what’s out there. See more.

You Must Review Your Finances First

When you have found a potential loan for you, you have to now take a moment to review your finances and see if this loan is going to be suitable after all. You have to think about what you are spending on monthly bills and everything else and what you have left over. It could be that for the next few months, you have to give up the luxuries of going out to dinner once a week and few other things have to be stopped if you want a loan. Understanding your finances and how far they will stretch will be important when it comes to finding loans without guarantors.

Find the Best Loans without Guarantors Today

Loans that don’t require guarantors can be very important for thousands of borrowers each year as they don’t have anyone to act as guarantor. When you don’t have anyone to go as guarantor it can be concerning and for some, they can’t get the loan they want. However, when you look at a loan that doesn’t require a guarantor you can ensure you get far more value for money. You can get a suitable loan and ensure you are happy with it too. Loans without guarantors are useful and there are many good loans available too. Click here for more information: https://www.steponefinance.co.uk/mortgage-loans/