Home repair loans, or home improvement loans, are often available for homeowners who need to make repairs, additions, or renovations to their home property. These types of loans usually become available after a certain amount of time after the first mortgage is drawn (usually at least a few years after the person has been living there already).
Some types of home repair loan disputes that frequently occur may include:
- Home repair loan fraud: Fraudulent loan tactics, such as the use of misrepresentation or deceit, can sometimes cause a dispute over the validity of the loan. These are similar to other forms of loan fraud such as mortgage fraud.
- Non-payment of monthly loan payments: Defaulting on a home repair loan can cause problems and can begin a cycle of debt that was not considered at the initial purchase of the home.
- Bankruptcy and other types of debt issue: Bad credit can sometimes hinder a person’s ability to obtain a home repair loan.
- Failure of a project: Sometimes, a home repair project can fail in the middle of the construction or repair process. For instance, if a contractor backs out, this can cause problems for the homeowner and may lead to default status on the loan.
Thus, it’s important to calculate the full amount of expenses and costs when drawing out a home repair loan. It’s also important to consider calendars and time tables for the projects, so that you don’t run into issues when the loan payments start becoming due each month.
Defaulting on a home repair loan can sometimes lead to legal consequences. Similar to other types of loans, the lending company might be able to reach the borrower’s other property through a lien, in order to obtain compensation for missing payments. This can have other negative consequences on the borrower, such as an impact on their credit scores.
In limited instances, some home repair loan companies may be willing to work with the borrower in terms of an alternative payment plan. They may allow for a re-working of monthly payment rates, or other such alternatives. You might need to negotiate such terms with the company, and this is not always an option in every case.
Home repair loans can be helpful and will usually improve the value of a home in the long run. In the event that you come across a legal dispute over a home repair loan, you may wish to hire a real estate lawyer for help and advice. Your attorney can advise you of your options regarding the dispute, and can assist you in court if you need to make an appearance before a judge.