Getting a home equity loan for those that have poor credit can pose a bit more difficultly but that does not mean that you can’t get these loans. In fact, a home equity loan is likely to be one of the many types of loans that you can tap into for less cost even with bad credit. Because this type of loan is secured to the value of your home, interest rates are considerably lower than those rates of credit cards or other personal loans. What’s more, because it is secured, it poses less of a risk to the lender which means even those with less than perfect credit can qualify for them.
Equity: Secured Loans
To determine if you have equity in your home, determine its value. The value of your home can fluctuate with the housing market in your area, but generally moves up rather than down. The only way to know for sure what the home is worth is through an appraisal which your home equity lender will require. The value of the home minus any debts, mortgages or tax liens that you have on the home equals the equity that you have within the home. This money can then be borrowed through a secured loan, similar to your mortgage.
Qualifying For Equity Loans
In order to qualify for these types of loans even with bad credit you should consider the following tips:
1. Make regular payments on all debts to show that you can make payments steadily. A credit score going up is a better option than one going down.
2. Have verifiable, steady income coming in that is high enough to pay for your current debts as well as the monthly payment of the home equity loan.
Getting a home equity loan with bad credit can be simplified when you can show the lender that you are a good risk for them, even if your credit report doesn’t say so!
Suggested Poor Credit Home Equity Lenders Online - We maintain a list of recommended mortgage companies online and update the list regularly.
50 Things to Know About Home Equity Loans - Read this list of things you should know before getting a home equity loan.