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