Qualifying for a home equity loan with a poor credit rating is not as difficult as it sounds. Having bad credit simply means you need to invest the time required to find the most competitive loan offer. Here are several tips to help you qualify for the best home equity loan.
When you borrow with a home equity loan, the loan is secured by your home. If you default on this loan your mortgage lenders will get together and sell your home at auction to recoup their expenses. Equity is the difference between what you owe on your present mortgage and the appraised value of your home. It is relatively easy to qualify for a home equity loan; if you have bad credit you may have to pay a higher interest rate for the loan.
Lenders Want Your Home Equity Loan
There are a great number of lenders that specialize in bad credit loans. These lenders are often referred to as “Sub-Prime” mortgage lenders. Shopping for offers from many of this type of lender will help you find competitive home equity interest rates. There are good deals to be found for homeowners with poor credit ratings, you just need to invest the time finding them. To learn more about your mortgage options including common mistakes to avoid, register for our free mortgage guidebook: “Five Things You Need to Know About Your Mortgage.”