Page 25 - Book6E

• Investigate several lenders, including at least one bank and one credit union in your community. Don’t assume that if you have credit problems, you won’t qualify for a loan from a bank—you could be surprised!
Comparison Shop—Questions You Should Ask
• What are the monthly payments?
• What is the annual percentage rate (APR)? Use the APR to compare one loan with another.
• Will the interest rate change at anytime? If so, when, how often, and by how much?
• How long will you have to repay the loan?
• Isitaloanoralineofcredit?
• Is there a balloon payment—a large single payment at the end of the loan term?
• How much will you have to pay in points and fees? One point equals 1 percent of the loan amount (1 point on a $10,000 loan is $100). If you will have to pay more than 5 percent of the loan amount, ask why.
• Are the application fees refundable if you aren’t approved for the loan?
• What are the lender fees?
• What is the penalty for late or missed payments?
• Is there an early pay-off penalty?
• Is credit insurance for disability or unemployment included or available? Is it optional?
After you pick your lender, you’ll want to get copies of the following:
• “Good Faith Estimate” of all loan charges and terms. This must legally be sent to you within 3 days of applying.
Home Equity Loans
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