San Diego Home Equity Loans

Written by Tara Peris
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In San Diego, home equity loans have changed how homeowners view their mortgages. No longer seen as cumbersome reminders of long-term debt, mortgages are now viewed as dynamic resources that allow financial flexibility and stability. This shifting perspective has empowered buyers and enabled them to do a good deal more with their money.

Home equity loans basically capitalize on the growing value of your home. That is, as you make payments on your original mortgage agreement, your home appreciates and you earn equity. You can then use this equity to secure another loan if you so desire. The second loan (a.k.a. the home equity loan or second mortgage) will typically come with a higher interest rate and a shorter payback period, but can provide much needed cash for large expenditures.

Understanding the Risks

The advantage of quick, easy cash is clear; however, there are a number of risks associated with home equity loans and you must be aware of them in order to protect yourself. Fraud runs rampant in the home loan industry, but people who pursue home equity loans are particularly vulnerable. Understand the terms of the agreement fully before putting your home at risk. If you can't afford to make payments, you run the risk of losing your home altogether.

There are all sorts of scams associated with home equity loans, most of them aimed at the underprivileged and the elderly. Some lenders will engage in equity stripping, loan flipping, and fraudulent document management to bamboozle clients out of their equity, and in many cases, their homes. Always get a second opinion and do not sign any agreement unless you understand it in its entirety.

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