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Tips from a Trusted Norfolk Contractor: The “Home Improvement” Loan Scam

Tips from a Trusted Norfolk Contractor

A contractor calls or knocks on your door and offers to install a new roof or remodel your
kitchen at a price that sounds reasonable. You tell him you’re interested, but
can’t afford it. He tells you it’s no problem – he can arrange financing
through a lender he knows. You agree to the project, and the contractor begins
work. At some point after the contractor begins, you are asked to sign a lot of
papers. The papers may be blank or the lender may rush you to sign before you
have time to read what you’ve been given to sign. You sign the papers. Later,
you realize that the papers you signed are a home equity loan. The interest
rate, points and fees seem very high. To make matters worse, the work on your
home isn’t done right or hasn’t been completed, and the contractor, who may
have been paid by the lender, has little interest in completing the work to
your satisfaction. You can protect yourself from inappropriate lending
practices. Here’s how.


  • Agree to a home equity loan if  you don’t have enough money to make the monthly payments.
  • Sign any document you haven’t read or any document that has blank spaces to be filled in after you sign.
  • Let anyone pressure you into signing any document.
  • Deed your property to anyone. First consult an attorney, a knowledgeable family member, or someone else
    you trust.

The Written Contract

Contract requirements vary by state. Even if your state does not require a written
agreement, ask for one. A contract spells out the who, what, where, when and cost of your project. The agreement should be clear,
concise and complete. Before you sign a contract, make sure it contains:

  • The contractor’s name, address,   phone, and license number, if required.
  • The payment schedule for the   contractor, subcontractors and suppliers.
  • An estimated start and    completion date.
  • The Norfolk contractor‘s obligation to   obtain all necessary permits.
  • How change orders will be handled. A change order – common on most remodeling jobs – is a written
    authorization to the contractor to make a change or addition to the work
    described in the original contract. It could affect the project’s cost and
    schedule. Remodelers often require payment for change orders before work
  • A detailed list of all materials  including color, model, size, brand name, and product.
  • Warranties covering materials  and workmanship. The names and addresses of the parties honoring the
    warranties – contractor, distributor or manufacturer – must be identified.
    The length of the warranty period and any limitations also should be
    spelled out.
  • What the contractor will and  will not do. For example, is site clean-up and trash hauling included in
    the price? Ask for a “broom clause.” It makes the contractor
    responsible for all clean-up work, including spills and stains.

Oral promises also should be added to the written contract.

More Tips on Renovation (, , )

If you are looking for a Virginia Beach home improvement services then please call 757.306.0500 or complete our online request form.