Hidden dangers in home equity loans
Home equity loans may not be as attractive as they seem. In the long run, they can sometimes be more costly than conventional types of loans. Contributors to high home equity loan costs: excessive closing costs, variable interest rates without protective caps, high “point” charges, long payback periods, and large lump sum balloon payments at the end of the payback period. Suggestion: compare total costs between home equity loans and conventional loans before you borrow.