| Truth in Lending Laws | | | | borrower the change their mind about the loan, the |
| As a borrower, it is often difficult to know your legal | | | | lender is required to refund any fees collected. |
| rights regarding home equity lines of credit. This is | | | | Your Rights with a Home Equity Line of Credit |
| especially true with private hard money loans from bad | | | | Whether you are dealing with a bad credit loan or an |
| credit mortgage lenders. Borrowers need to be aware | | | | A-paper home equity line, the Truth in Lending Act |
| that the Truth in Lending Act requires lenders to | | | | gives borrowers a three day rescission period, |
| disclose the specific terms and costs of their home | | | | essentially a small window of time to change their mind |
| equity plans - terms such as APR, broker charges, the | | | | about the bad credit loan. If a borrower decides that |
| payment terms, and any variable-rates that may apply. | | | | the bad credit loan or traditional home equity loan is not |
| It is also important to note that a lender and anyone | | | | right for them, they can inform the creditor in writing |
| else associated with the transaction may not charge a | | | | during this recession period of their change of heart. |
| fee until after the terms and costs have been | | | | The bad credit lender must then cancel the security |
| disclosed to the borrower. These disclosures will | | | | interest in the home and return to the borrower all fees |
| typically be available to you once your receive the | | | | involved. |
| application form from the lender. If a term or cost in | | | | Knowing your rights can save you from making the |
| the loan is altered or changed before the loan goes | | | | wrong decision when it comes to a bad credit lender |
| into effect (other than a variable-rate feature), the | | | | loan or traditional home equity loan! |
| borrower must be informed. If this causes the | | | | |