How are the elderly affected by predatory lending practices?
Answer:The elderly are often cash poor but equity rich and are an easy target for predatory lenders. The elderly do have low fixed income in most of the cases and need access to home equity to pay for medical care and home maintenance. Minority elderly homeowners have limited access to traditional approved lenders and have to rely on less legitimate sources, which leaves them really vulnerable to predatory lending practices.
Examples of Predatory Lending Targeting the Elderly
Accepting a double digit interest rate means you may end up with a balloon payment nearly as big as the starting loan balance.
Refinancing multiple consecutive times with no purpose in sight and paying expensive insurance premiums can triple your loan instead of reduce it.
Excessive fees, harmful provisions, prepayment penalties, equity stripping are among the most common predatory lending techniques targeting the elderly.
Final piece of advice: Monitor your credit report and score regularly, to ensure there are no inaccuracies or unauthorized activity. Your credit report and score are the two major methods that creditors and lenders use to make a credit decision about you. Higher scores usually mean lower interest rates, which will save you money.
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