Question

To avoid the practice of equity stripping, what advice would you give to a low-income homeowner who needs to borrow money?

a) Seek assistance from local government housing programs.
b) Consider nonprofit organizations offering low-interest loans.
c) Explore community credit unions for fair lending options.
d) Prioritize government-backed mortgage assistance programs.

Answer 1

To avoid equity stripping, a low-income homeowner should seek assistance from local government housing programs, consider nonprofit organizations offering low-interest loans, and explore community credit unions for fair lending options.

Step-by-step explanation:

To avoid the practice of equity stripping, a low-income homeowner who needs to borrow money can take the following actions:

1. Seek assistance from local government housing programs: These programs often provide financial assistance, counseling, and resources for low-income homeowners.
2. Consider nonprofit organizations offering low-interest loans: Many nonprofits offer loans specifically designed for low-income individuals, with lower interest rates and more flexible repayment terms.
3. Explore community credit unions for fair lending options: Community credit unions often provide loans with better terms and rates for their members, including low-income individuals.