General Housing Information Article
Loans and Your Home: Know the Danger Signs
Getting a mortgage, refinancing a mortgage or taking out a home equity loan shouldn’t be scary - but the wrong agreement can cost you unnecessary interest charges and fees, and may even cost you ownership of your home. This information can help you protect yourself from risky loan agreements.
Possible warning signs of a risky loan agreement
Although many mortgage lenders are reputable, there are some lenders who may take advantage of a homebuyer. Here are some possible warning signs of a risky loan agreement. These are things that you want to look for if you are purchasing a home. One effective way to protect yourself is to learn about the lending process and about the mortgage lender specifically before meeting with a lender.
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The lender contacts you in person, at home, by mail or telephoneYou are told you’ll be approved, regardless of your creditYou’re told you must lie about your income to get the loanYou’re told to stop making payments on your current loan or to other creditorsYou’re told to send payments for your current loan directly to the person or company offering you the new loanThe interest rate may increase over the course of the loan - an Adjustable Rate Mortgage (ARM)The loan includes a prepayment penaltyThere is a large payment at the end of the loan - sometimes called a ‘Balloon’ paymentThe lender pressures you to sign the papers ‘NOW’ if you want the dealYou’re told not to worry about the ‘fine print’ - sometimes the lender will pretend to explain it to you rather than to give you time to read it - don’t feel pressured – make sure to take the time to read the fine print.You’re asked to sign, or ‘deed,’ your home over to the lender.The loan is suggested to you by someone offering you home improvement repairsYou’re asked to sign documents with blanks or in a language you don’t understandIf Something Sounds Too Good to Be True - it usually isHOW CAN I PROTECT MYSELF?If you are not already familiar with basic real estate terms, it can be helpful to familiarize yourself on commonly used real estate terms before signing documents. Here are some commonly used terms:
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Refinance: replacing an existing loan with one with different termsTerms: refers to interest rates, repayment period, type of interestHome Equity Loan: loan in which your home is used as collateralBalloon Payment: a lump sum payment paid at the end of the loan termFixed Rate Mortgage: a loan where the interest rate does not changeAdjustable Rate Mortgage (ARM):a loan where the interest rate may increase during the life of the loanPrepayment Penalty: a charge to pay off the loan early, usually when the loan is refinancedNegative Amortization or Interest Only Loan: your loan balance INCREASES as you make your paymentsIf you are concerned with the terms of your loan agreement, consider talking to an attorney or housing agency before you sign it. If you have already signed the loan agreement and are concerned that you may have a legal issue, you may want to contact an attorney. If you believe that you have been the victim of consumer fraud, file a complaint with the Arizona Attorney General’s Office.
Comments:QUESTIONS
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I have two roommates I no longer want in the private mobile home I am purchasing from owner how do I get them to move
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I am thinking about having a yard sale. I have a steep driveway. Am I liable if a person falls due only to the steepness of the driveway? What if I put up a sign to enter at own risk?
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My daughter owns a home in Peoria and has enough land for me to sit a mobile home or motor home on to live in. Is there any law or zoning restrictions i have to obey?
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I was running late to trial and sent an email along with a call to judges chambers. An automated email provided a number to contact as they were out of the office. So I called there was no answer so I left a message. I was going theu security around 940 am. And hit the court room floor about 943, 944am, court was scheduled for 930am. As I was approching I seen the opposing party walking out , the bailiff locking the door behind them. Extremely rude, as the first time we met, she replied, to questions I asked, "get a lawyer, you will get some thing in the mail. I can file an appeal right?
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We have 2 homes 3 mortgages all mortgages were with Bank (Proper name removed). Our residential home is on trial modification. Bank sold the loan in July with our investment property to a loan servicing company (Proper name removed) before I could finish with it's modification, I want to modify our HELOC loan that Bank holds on the investment property also. If I can't modify these 2 loans the house may go into foreclosure. My question: If Loan Servicer suggests fore closer whats going to happen with our HELOC loan with Bank.? Loan is around $101,000 HELOC at 83,000 and house is worth about 145,000.We really don't know whats best for us
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My HOA billed me for fence painting that was done before I owned my house. Am I liable for paying for work done before I owned the property?
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What are the laws to have normal wear n tear fixed. How often?
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I purchased a home about a year ago with my domestic partner. I am the only person financially responsible for the home. I added my domestic partners name to the title as a joint ownership. In case in the future my domestic partner and I part ways, would we have to sell the home? Does she have any legal rights over the home?
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I have lived with a lady for 16 years as man and wife but we are not married. I have took care of her farm and repairs ,and now she wants me to move ,legally do I have to move or do I have any legal rights to live on her farm?
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Hello, my husband & I purchased an older home in Aug. The Sellers listed on the disclosure statement that they treated for roof rats. However, they didn't solve the issue. It has taken us 6 months to resolve the problem not to mention a lot of money. Since it was listed on the disclosure statement, do we have any recourse?
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