<p>Hi Everyone! I got couple questions. My parents signed “Homestead” Act and agreed to pay $500,000! To me, that’s a lot! I did read the papers before they signed it. It just explained how the homestead act will protect my parents etc etc. I thought it was not a good idea because it seems like the lender was trying to pressure time on my parents to sign the papers witout reading it. He keeps on telling us there are good advantages of having the homstead act and trying to avoid my questions about the disadvantages. However, I wonder if there are any disadvantages? Please explain. I don’t want my parents getting ripped off and losing that money they just paid. Thanks!</p>
<p>I have no idea what this is.</p>
<p>Are you sure they agreed to pay money? It sounds like what you may be talking about it is a “homestead exemption” which, at least where I live, is something that a homeowner can file with a county recorder to protect the equity in his or her house from creditors. If that is the case, it is not an obligation, but a protective measure. For example, in the state where I live, a person can file a homestead that protects a set $ amount, I think it is like $150,000 in equity. It doesn’t protect against voluntary liens against the house, but protects against other creditors.</p>