Home Equity Loan after Bankruptcy - Should You Use a Prime or Subprime Lender?


Visitors: 93

Right after a bankruptcy, your best choice for financing is a subprime lender. Subprime lenders are willing to lend to those with bad credit, even if a bank has turned you down. But if you have improved your credit with time, cash assets, or a high salary, you can get better financing rates with a prime lender.

Begin Your Credit History With A Subprime Lender

Subprime lenders are more lenient with their loan qualifications than prime lenders. As soon as your bankruptcy has finalized, you can qualify for a home equity loan with subprime lending companies.

Rates vary between 1% to 12% over prime rates. The first year after a bankruptcy, rates and fees will be at their highest. After 12 months and a positive payment history, rates will drop by a point or two. 24 months after your bankruptcy, your credit score is largely based on payment history, debt ratio, and income – not your past bankruptcy.

Terms and conditions are also more flexible with a subprime company. They are more willing to offer 100% financing. With some loans, you can include finance fees as part of the principal.

Apply For Prime Financing Sooner Than You Think

Prime home equity financing isn't just for people with perfect credit. You can qualify for prime rates even if you had a bankruptcy two years ago, a late payment on an installment or revolving account, or a debt ratio of 45.

Prime loans offer the lowest financing rates and fees. You are also subject to fewer fees in most cases. Prime lending offers traditional terms, which may limit how much you can borrow.

Where To Find Your Lender

With recent changes in the financing sector, most lenders offer both prime and subprime loans. While most traditional banks and credit unions will offer financing to those with poor credit, they won't always approve home equity loans for people with recent bankruptcies.

Start your financing search by asking for home equity loan quotes from all types of lenders. Be honest about your credit situation, income, and assets. That way you get loan estimates you can rely on.

With some time spent researching financing companies online, you can discover good terms for your next home equity loan.

Visit Home Equity Wise to view our Recommended Home Equity Lenders online. Also, visit Home Equity Wise for more information on getting a Home Equity Loan After Bankruptcy .


Article Source:

Rate this Article: 
Home Equity Line of Credit - Finding The Best Home Equity Lender
Rated 4 / 5
based on 5 votes

Related Articles:

Refinancing After Bankruptcy - How to Find a Refi Sub Prime Lender

by: Carrie Reeder (December 29, 2005) 
(Finance/Mortgage Refinance)

Things To Look For In A Home Equity Loan Lender

by: C.L. Haehl (March 30, 2007) 
(Real Estate)

Delaware Home Equity Loans – Finding a Delaware Home Equity Loan Lender

by: J.A. Hale (November 27, 2006) 
(Real Estate)

Bad Credit? Finance Your Home Mortgage Loan with a Sub Prime Mortgage Lender

by: Carrie Reeder (November 18, 2005) 
(Finance/Mortgage Refinance)

Sub Prime Mortgage Tips: Home Equity Loan Consolidation for People with Less ..

by: Maria Ny (July 10, 2006) 
(Finance/Mortgage Refinance)

Home Equity Bankruptcy Loan Lenders

by: Arturo Ronzon (February 18, 2008) 
(Finance/Mortgage Refinance)

2nd Mortgage after Bankruptcy: How to Qualify for a Competitive Home Equity Loan

by: Louie Latour (October 02, 2006) 
(Real Estate)

Home Equity Lenders - Finding a Good Home Equity Lender Online

by: Carrie Reeder (December 26, 2005) 
(Finance/Mortgage Refinance)

Are Non Conforming Mortgage Loans Prime or Subprime Home Financing?

by: Keith Hinkley (August 04, 2006) 
(Finance/Mortgage Refinance)

Home Equity Line of Credit - Finding The Best Home Equity Lender

by: Carrie Reeder (May 21, 2005) 
(Finance/Mortgage Refinance)