Unfortunately, not everyone in the world today has perfect credit, and some people flat out just abuse their credit and don’t handle it well, especially in the younger generation. They don’t think about the fact that those charged-off credit cards and repossessions could possibly prevent them from getting a mortgage later in life, or if they already own their own home, could prevent them from getting an equity loan. Well, the good news is that if you fall into this category, you still may be able to qualify for that home equity loan that you need.
Even if you do have bad credit, your home likely still needs routine repairs or updating, and odds are, you can’t afford to pay for it all on your own, which is why so many lenders are starting to do home equity loans, even for those people with less than perfect credit histories.
Thanks to those poor credit loans, you don’t have to put up with a leaky roof or a cracking foundation any longer, you can get the funds that you need for those repairs, even if you have been turned down by other lenders. Of course, depending on just how bad your credit rating is, it may not be easy to find a lender that will be willing to give you the type of loan that you are looking for, but it can be done.
You may not have any luck in dealing with your local mortgage lenders, especially if they don’t have any kind of bad credit loan program currently in place. You may end up having to look for lenders who deal specifically with home equity loans for people with poor credit. Certain lenders created these loans because they know that with today’s economy and unemployment rates, not everyone can always have perfect credit, no matter how hard they may try. They realize that not having perfect credit doesn’t necessarily mean that you are a bad person, or that you will automatically take their money and run, as many lenders still believe. They go above and beyond to try to help people get their loans approved so that they can take care of their homes.
Even though these lenders are out there, they typically require that you have a credit rating of at least 500, before they will even start the loan process with you. The higher your overall credit rating is, the better your loan terms will be. Some lenders are more willing to work with you than others, and some will even try to get you a loan if your credit rating is below 500, but typically, you will have a higher interest rate and a shorter repayment period. Still yet, you shouldn’t accept the first loan that you are approved for, as it is still in your best interest to shop around for the best possible deal. You still can negotiate with your lenders to try to get a better deal, if you know how to go about it.
The bad thing about your interest rate is that if you have bad credit it will generally be high, meaning that you will also have pretty high monthly payments. Don’t accept a loan that you know you will have difficulty making the payments on, be honest with the lender about what you can afford to pay, and don’t go above that amount. Many lenders will work to get payments that you can afford, although it may take them some time to get this done on your behalf.
Above all else, remember that if you take a loan that you cannot afford to pay back, you stand to lose your home, so keep that first and foremost in your mind during the entire loan process!