As home equity loans have gained popularity among Americans, the National Home Equity Mortgage Association has offered a number of guidelines for borrowers to follow. They include:
Borrow within your income and budget: A home equity loan is a major financial undertaking.
Borrow for necessities or to take advantage of lower interest rates: NHEMA does not recommend taking a home equity loan to finance a luxury item or trip.
Don't refinance too frequently: Refinancing a home loan can mean additional closing costs and fees.
Be wary of door-to-door sales: Research your lender thoroughly, and consult a financial adviser.
Know what you're signing: Read everything carefully, and don't sign a loan agreement until you are aware of all financial obligations.
Three-day window: After the loan agreement is signed, you have three days to change your mind and void it.
Trust your instincts: Complain if you feel you've been cheated or treated improperly.
Information: Call NHEMA at 800-342-1121 or visit its Web site at www.borrowsmart.org.