This article tells you about The Pro’s And Con’s Of Home Equity Line Of Credit. Do you own a house? If you answered yes, your home could possibly be your biggest asset. But if you have a loan based on your homes equity, you could be risking your greatest asset.
Homeowners, and certainly those with a poor line of credit, must be extra cautious about making loans based on the equity of their home. I say this because these types of borrowers are sometimes targeted and taken advantage of by manipulative lenders. And this puts their home at risk.
Here is some of the things you must understand in looking after your line of credit, which will hopefully protect you from those nasty lenders.
If you know you don’t earn enough to make payments to a loan, DO NOT agree to taking out a home equity loan. Plan carefully to make sure you’ll be able to pay your bills and payments for the equity line.
Check all the documents you receive and don’t sign anything you haven’t read or didn’t understand. Lenders sometimes do this to take advantage of borrowers, especially those unfamiliar with contracts and agreements. Read all the terms and conditions and don’t sign until you understand them.
If you are pressured to sign by your lender or anyone else, this should be a warning sign to you. You should also be careful to avoid types of loans that come with products you don’t need.
Also ask if the line of credit insurance is necessary to a condition of the loan. If its not, and the loan includes this charge but you wish to eliminate it, you can request that the charge be removed from your loan so that it won’t add to your bills. If you want extra security, search for the best rates.
Keep all records regarding your loan/ line of credit, including your payments, billing statements and cancelled cheques. If you come across some incorrect charges, contact the lender immediately.
Also check the contractor’s references and find out when thee work should have been finished.
As stated above, go through the terms and conditions carefully, and if you need something explained or verified, don’t be afraid to ask. Speak to someone you trust and ask them for help. Or if in doubt, approach an attorney or a well-informed member of your family.