Get a Bad Credit Home Equity Loan
If you are getting buried in debt, a home equity loan could be the answer. Even with bad credit, this could be your way out and this article explains why.
For people with bad credit, getting the money to pay off medical bills, buy a new car or even to pay off the credit cards that got them into debt in the first place can be a very difficult process. But for homeowners who are facing these things with bad credit, there may be hope. A bad credit home equity loan can be the answer to all of your debt problems, if you have built up a good bit of equity in your home.
Many people with bad credit are reluctant to even apply for a loan to get them out of their debt problems. But the beauty of a bad credit home equity loan is that you are only borrowing against what you have already paid into your home. And, as long as you avoid credit cards and other credit accounts once you have borrowed against your home, you can actually repair your credit in only a fraction of the time.
What is Home Equity?
Before you go to apply for a bad credit home equity loan, you should understand exactly what home equity is, and what it is not. The simplest explanation of hone equity is that it is the amount that your home appraises for on the current real estate market, minus the current balance of your original mortgage. For example: if your home currently appraises for $150,000, and you have a remaining balance of $60,000 on your original mortgage; then the amount that you could borrow up to on a bad credit home equity loan would be $90,000.
We say up to because there is no guarantee that a bank offering a bad credit home equity loan will loan you the full amount of the equity you have accrued. This will be completely determined based on your actual credit history, your current income, among other factors.
Obviously, since your credit is questionable to begin with, the actual amount of your loan will be decided by a qualified loan officer. Be sure to have plenty of proof of all real income on hand when you apply for a bad credit home equity loan, so that the loan officer can have an easier time deciding how much to loan you.
If you know that you will need a bad credit home equity loan to pay off overdue bills or credit cards, you may want to make certain that you have accrued enough equity in your home first to be able to cover the amount you will need to borrow, if you are not allowed to borrow the full amount. You can quickly build more equity in your home than you already have, by making a few double mortgage payments prior to applying for a bad credit home equity loan. It makes sense and may be a viable option.