San Diego Home Equity Loans

Written by Stephanie Dula
Bookmark and Share

Many people who own homes in the San Diego area and elsewhere are choosing to tap into the equity in their homes with a home equity loan. Equity is defined as the fair market value of the home, minus the outstanding balance of the mortgage. Borrowing this way has become extremely popular for a number of reasons, not least of which is the fact that there is no need to sell the house to tap into its equity.

Using one's home as collateral can be financially wise for both lenders and homeowners. Borrowing against the collateral of one's own home can lead to lower monthly payments and extra money for debt consolidation. The money can also be used for increasing the value of the property through home improvements.

Unethical Home Equity Loan Practices

However, since one's home is used as collateral for the loan, it's important not to let all the possibilities of extra cash become too overwhelming. Home equity scams are on the rise with the popularity of this type of borrowing. Since defaulting on a home equity loan can lead to foreclosure, it's absolutely imperative that individuals not borrow more than they can comfortably afford to pay off.

Unfortunately, many unethical lenders will solicit home buyers' business with promises of a huge amount of cash at closing, only to tag on extra expenses at the very end. This kind of unethical lending practice is extensively described on several reputable real estate industry websites. Much like shopping for any other kind of loan product, it's important not to fall for the first good offer that comes along. Careful research as to current rates in one's specific market and different home equity products available is essential to finding a loan program that will pay off.

Bookmark and Share