-
Be prepared to work at understanding the loan.
-
READ the loan documents. Pay close attention to provisions regarding default (does the lender have to notify you that it did not receive a payment before declaring the entire loan due?)
-
Are you placing a lien on your home? Is that really a wise decision?
-
Do you understand all the fees and the interest rate? Is the rate fixed.
-
What are the late fees and when are they charged?
-
Is there a provision for increasing the interest rate later? Is the rate increase limited (capped)?
-
Is the lender offering better rates to other borrowers similarly situated (ask!)? Know your credit rating and your credit score.
-
Have you considered other lenders? Have you compared other available loans.
-
Use common sense. If the lender advertises more than others do, its loans might be more expensive. If what you are told is too good to be true, it probably is not true. There
is no Santa Claus.
-
Get help from someone you trust if you are not sure. Do not let anyone pressure you into signing. You should not feel guilty if the salesperson acts unhappy about your reluctance.
-
If you feel cheated by a lender, don't fail to act out of embarrassment. Get professional help from a government agency or a private lawyer.
