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.

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.