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| We've all seen the aggressive marketing campaigns for refinance and home equity loans. They may seem tempting but they may not be the best financing alternative – they could even risk a family's financial health, a home's equity and the stability of a neighborhood. Knowledge is protection – learning about refinancing and the mortgage process puts the power to protect both home and family in the homeowner's hands. Through San Antonio's Don't Borrow Trouble Coalition, a wide variety of information, education and support like the following is available: |
- Information and education on mortgage loans, home equity loans and credit repair.
- Organizations that you can file a complaint with on predatory lending practices.
- Legal advice.
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Possible Warning Signs of Predatory Lending
- Total bank fees greater than 2 percent.
- Balloon payment
- Penalties if you pay off the loan early (prepayment penalties)
- Loan is based on how much your home is worth rather than your income and ability to pay.
- Credit life insurance added to the loan.
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Illegal Practices
- Not providing required written disclosure such as: Good Faith Estimate (estimate of closing costs and total cost of loan over the life of the loan) and the Annual Percentage Rate (APR)
- Misrepresentation of loan such as: Switching a fixed rate to an Adjustable Rate Mortgage(ARM) or switching from 10 percent interest rate to 15 percent interest rate at the time of closing.
- Negotiating loans in Spanish, but providing documents in English: If this is done in a home solicitation, it is illegal by Texas State Law.
- Fraud such as: including credit life insurance without the borrower's consent.
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Be a Smart Borrower
Get Connected! Call 227-HELP (4357) or 2-1-1 and find out who to call and where to get help.
Get Credit Smart! Learn about cleaning up your credit before you apply for a loan.
Shop Around for different loan products and lenders.
Do Not Deposit Any Cash with a lender unless you know their refund policy.
Take Notes and keep all signed and unsigned documents.
Never Be Pressured to sign documents before reading and understanding them. |
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United Way of America