| Most people with bad credit do not realize that if | | | | spend the money. If your answer is that you |
| they own their own home and are paying off a | | | | want to consolidate your debts and make |
| mortgage, they can qualify for a home equity | | | | improvements to your home, then the chances |
| loan. Even with bad credit, a home equity loan is a | | | | are high that you will be approved. |
| possibility, because the home itself is collateral. If | | | | With bad credit, home equity loan lenders want to |
| you default on the payments, you will lose your | | | | make sure you will repay the money. With the |
| home, just as you will by not making your | | | | bad credit rating that you have, they are taking a |
| mortgage payments. As long as you have been | | | | risk lending you a large amount of money. |
| making every effort to keep the payments on | | | | Therefore, the interest rate you pay on the loan |
| your home up to date, most lenders will approve | | | | will be higher. There are closing costs associated |
| a loan based on the equity you have built up over | | | | with getting this type of loan, but they are not as |
| time. | | | | high as getting a regular mortgage. Just like with |
| You do need to have 20% or more of your | | | | getting a mortgage, you can have these costs |
| mortgage paid off. If this fits your situation, even | | | | included in the loan, so you don't have to come up |
| though you have bad credit by not making other | | | | with money up front. |
| payments on time or by missing them altogether, | | | | There are many lenders with an online presence |
| with your bad credit, a home equity loan is | | | | where you can apply from home. It is best that |
| possible. You also have to provide proof of your | | | | you apply to several lenders and then you can |
| income and ownership of the home. The lender | | | | compare the rates, terms offered and the |
| will also require an appraisal to determine the | | | | payment amounts. By applying to several lenders |
| exact value of your home and thereby determine | | | | over the space of a few days won't damage |
| the amount of equity you have. The equity is the | | | | your credit record. Any creditors who check your |
| difference in what you owe on your home and | | | | record will see that you are checking out which |
| the amount of money you would get if you sold | | | | lender can give you the best deal. Using the |
| it. | | | | money from it to pay off your outstanding debts |
| If you have bad credit, a home equity loan would | | | | is a good idea. When you make your payments |
| be about 80% of the equity. Although there are | | | | on the loan on time, your credit rating will start to |
| lenders who will give loans for 125% of the | | | | rise. You will not notice the difference |
| equity, if you have bad credit, it is not likely that | | | | immediately, but after six months or a year, |
| you would qualify for this larger amount. The | | | | there will be a significant difference. |
| lender will also want to know how you plan to | | | | |