{"id":6302,"date":"2025-02-03T07:46:16","date_gmt":"2025-02-03T12:46:16","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=6302"},"modified":"2025-02-03T07:47:06","modified_gmt":"2025-02-03T12:47:06","slug":"borrowing-against-your-title-to-ward-off-deed-theft-a-smart-idea","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/borrowing-against-your-title-to-ward-off-deed-theft-a-smart-idea\/","title":{"rendered":"Borrowing Against Your Title to Ward Off Deed Theft: A Smart Idea?"},"content":{"rendered":"\n
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Some deed holders deliberately get a lien recorded on their properties to make it harder for anyone to commit deed theft<\/a> and take their homes. Is there anything to this?<\/p>\n\n\n\n

First, it\u2019s music to our ears when homeowners ask how to keep their deeds safe and sound. Borrowing against home equity<\/a> to get a voluntary lien can be helpful, but its protective power will be limited. To get an idea of whether the effort could be worthwhile, let\u2019s walk through potential scenarios.<\/p>\n\n\n\n\n\n\n\n

What\u2019s the Idea?<\/h2>\n\n\n\n
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Often, people consider applying for a home equity line of credit as their safety strategy. What\u2019s a home equity line of credit all about? A HELOC, as it\u2019s commonly called, is a revolving credit account. Deed holders can use the line of credit as they would use a credit card \u2014 withdrawing only what they need, and paying interest only on the amount they don\u2019t promptly pay off.<\/p>\n\n\n\n

This convenient, all-purpose credit line might have a term of ten years.<\/p>\n\n\n\n

OK, so imagine you receive a HELOC. Although you need not touch the funds at all, your HELOC lender will record a lien against your home. If you go to sell your home, you\u2019ll close your HELOC account so that the bank releases the lien.<\/p>\n\n\n\n

Some people decide to establish these accounts not to actually use, but so the lending banks will be notified if anyone attempts to tamper with their titles. And some leave these lines of credit (or even their original mortgages) open as long as possible \u2014 just so a bank has a stake in the title and reacts protectively against apparent fraud.<\/p>\n\n\n\n

It\u2019s not an absurd idea. The lien you voluntarily seek could make your home less attractive to swindlers than a home with a clear title. But is it worthwhile to actually open a new credit account, just to hopefully add a degree of title protection? Or will it be more of a hassle than it\u2019s really worth? Are there better alternatives?<\/p>\n\n\n\n

First, let\u2019s look at potential drawbacks.<\/p>\n\n\n\n

Check the Fees<\/h2>\n\n\n\n

First, note the fees that come along with a HELOC. Check on charges for applying, appraisals, closing on the HELOC, and, finally, fees for things like ending the line of credit. Some lines of credit have annual fees or transaction fees. Some even charge fees for inactivity!<\/p>\n\n\n\n

Granted, with some lenders, the fees are low. And some deed holders might find the HELOC funds useful and the borrowing rates relatively good \u2014 in which case the idea won\u2019t be an inconvenience. There are even some credit unions that offer HELOCS \u2014 again, like credit cards \u2014 with zero fees. Some home equity loans are zero-fee as well.<\/p>\n\n\n\n

The point is to check into the rate and fees for the credit line when deciding whether the method is worth the effort.<\/p>\n\n\n\n

But the possible costs of a credit line aren\u2019t everything. What you really need to know is this. Will the method actually work to prevent deed theft?<\/p>\n\n\n\n

Effective or Not?<\/h2>\n\n\n\n

If you borrowed from your equity and had a lien placed on your home, would that stop a swindler from exploiting your deed?<\/p>\n\n\n\n

You\u2019ll want to be mindful of these possible scenarios:<\/p>\n\n\n\n