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Money Savvy Weekend

Financial Planner

May 05, 2000|LIZ PULLIAM WESTON

Checklist: Bad Lenders

Things to do this weekend with your money

If you're considering a home equity loan or reverse mortgage, you should take steps to make sure you're dealing with a reputable lender.

* Today: Make sure the loan is suitable to your needs. Consult an independent financial or tax advisor for help. If you're considering a reverse mortgage, you can get counseling from many nonprofit agencies. To locate an agency near you, call the Housing Counseling Clearinghouse at (888) 466-3487.

* Saturday: Understand the loan's fees, interest rate, monthly payments and total costs. You have a legal right to know these terms. Reverse mortgages can be particularly complicated and subject to abuse by unscrupulous lenders; for more information on reverse mortgages, visit http://www.aarp.org /hecc/basicfct.html. The AARP Foundation has also produced a brochure and video explaining reverse mortgages and alternatives. Call the AARP Home Equity Information Center at (202) 434-6042.

* Sunday: Check out your lender with the Better Business Bureau at http://www.bbb.org. Complaints against a lender are a red flag; other warning signs include high-pressure sales tactics, contractors who offer home improvement loans, door-to-door solicitors and loans that require big balloon payments.

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