Bad Credit - Mortgage

Bad Credit Home Loan
Bad Credit Mortgage
Bad Credit Equity Loan
Home Equity Loan Bad Credit

One kind of loan that people with bad credit who own their homes might be able to qualify for is a home equity loan. A home equity loan is simply a second mortgage taken out on a house.

To get a home equity loan a person will need equity or value above the cost of a mortgage in the house. If a person’s mortgage exceeds the price for which they might be able to sell a home they probably won’t be able to get a home equity loan.

Lenders are willing to make home equity loans to people with bad credit because they are secured loans. A secured loan is a loan in which a piece of property is used as collateral. If the loan is not paid the issuer forecloses on the property.

How to find a home equity loan

There are many lenders who are willing to loan to homeowners who have equity in their houses. These lenders include banks, mortgage companies and home equity lenders. Typing the term equity loan into a search engine should produce a list of home equity lenders.

One good place to start the search for a home equity loan is with the company that holds the mortgage on your home. Those who have a good track record of making their mortgage payments should be able to get home equity loans from their mortgage company fairly easily.

What to look for in a home equity loan

A person should get the best terms and interest that they can on a home equity loan. The way to know that a person is getting the best terms is to compare several different loan offers and see which one is best.

When shopping for home equity loan, a person should always ask for better terms and interest. A lender might be willing to give better terms and interest especially with a borrower who is willing to go elsewhere.

Be careful with home equity loans

Home equity loans can be a good source of extra cash but they can also cause problems. Home equity loans will increase the mortgage payment on your property and could make foreclosure more likely. Never take out a home equity payment unless you are sure that you can make the higher mortgage payments. 

Another worry created by home equity payments is that the cost of the mortgage may exceed the value of the home. A person should check the price that homes similar to theirs are selling for and make sure that the mortgage amount doesn’t exceed that price. If the mortgage cost greatly exceeds the home value, the home could hard or impossible to sell.