Now the Consumer Financial Protection Bureau is raising the limit banks can charge you. Makes you wonder who this government agency is really protecting, doesn’t it?
The fee limit for a home equity loan in 1994 was $400. Last year in 2013, the limit was $625. All loan applications received on or after January 10, 2014 will have an increased fee limit of $1,000.
Of course, it is up to the individual bank and lender to decide whether or not to charge the limit. When shopping for a home equity loan, be sure to ask what the fee is. If they say $1,000, you know they are charging the maximum allowed by law. I advise shopping three lenders before deciding.
For a home equity or other small loan, I would look at a mid-size or small local bank, a credit union, and the bank I currently do business with. Don’t make the mistake of blindly taking the first loan offered.
In addition to the fee charged for a home equity loan, you also need to find out the following:
* Is there a prepayment penalty? If so, what are the terms?
* How does the adjustable rate work? What is the maximum the rate can go up to at the first adjustment? At each adjustment thereafter? The lifetime max?
* Is there an annual fee?
For more valuable information about home mortgage loans, please see Mortgage Rip-Offs and Money Savers.
I recommend the paperback copy over the Kindle, because the Good Faith Estimate forms are too difficult to read in the ebook format.
“If you’re considering getting a mortgage, read this to see what’s going on behind the scenes.” Posted November 8, 2013 by Lovelylight, user name