Shopping for a Home Equity Loan?

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Do you have equity in your home already, planning to borrow against it for a major expense? Start by doing a little research beforehand. Your friends and family are a good resource. You can start by asking about lenders. Many people will have some experiences they are willing to share. Then, do some comparison shopping. We need to do this to get better results. It's best to contact more than two lenders. Don't just talk to the ones you're familiar with, but shop very carefully. Visit your local banks, credit unions or mortgage company. Potential customers can make appointments with them. Start asking questions, especially if you do not understand the terms and conditions. You'll need to know more than the monthly payments. Find out what the total cost of the loan will be. As borrowers need to pay close attention to fees, this might include the following: the application or loan processing fee, underwriting fee, funding fee, appraisal fee etc.

Negotiating is a very important part of the process. Let lenders know you are shopping around for the best possible options. You can ask the lender to lower the interest, fees and points. The last piece of advice is for you to understand everything before you sign. Read the loan closing papers. Ask more questions if there are terms you don't understand. Don't allow anyone to rush you into agreeing. If the loan doesn't seem to meet your criteria, don't sign it. You can renegotiate or you can simply walk away. Often you will also have a right to cancel without penalty, if you do it within three days of signing.

Source: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt088.shtm

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