Do you know the Home Equity Loan Traps?

What is a Home Equity Loan?

A home equity loan is a loan secured by the equity value of your residence. The interest paid can be tax deductible. You can use a home quity loan to make home improvements, to replace other types of loans that are not tax deductible, and any loans that have higher interest rates.

What are some traps to be aware of?

Stripping - when lenders make loans that are difficult for the borrower to repay. They do this because they want to foreclose on the homes and sell them, thereby "stripping" away the home equity for their own profit.
Flipping - tricking victims by "flipping" their original loan several times. This means that instead of foreclosing, the lender offers to refinance.
Packing - lenders will "pack" charges along with the loan i.e. bundle life insurance, regular life insurance and other services into the new mortgages. These additions are usually unnecessary and do not benefit the borrower.