Bad Credit Home Equity Loans
Home equity loans use your home as the collateral for your debt.
Because the home must have sufficient value to cover the
mortgage it may easier for a person with sub par credit to
qualify for a bad credit home equity loan.
What to expect – A bad credit home equity loan will
generally have an interest rate at least two points higher than
a conventional home equity loan. Other additional fees may be
required for a person with bad credit. You may also be required
to pay off some bills with the money you receive from your home
equity loan.
Ask questions – People with bad credit are sometimes
intimidated by lenders. In the mortgage industry many lenders
make more money off of the bad credit loans they make than off
of the loans they make to people with excellent credit. An
honest lender is entitled to make additional money for taking on
additional risk. However, don't be taken advantage of by a
predatory lender. Some unscrupulous bad credit home equity loan
companies will pile on unnecessary fees and penalties. Look at
each item on your loan proposal and ask about anything that
seems out of line.
The money – What are some good uses for a bad credit home
equity loan? You may want to consider doing home improvements or
repairs that increase the value of your home. Debt consolidation
may also be a good idea. Paying down debt is an excellent use of
your equity proceeds if a lot of your debt comes from high
interest credit cards.Here are our recommended bad
credit mortgage lenders online:
Mtg Lenders For People With Credit Problems:
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When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.
Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.
The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.
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