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" Bad Credit Home Equity Loans "
Do you have less than stellar credit? Maybe you’ve run into some of life’s challenges like suffering at the altar of high medical costs or soaring college tuition fees for your children. A situation where you have bad credit is only temporary; it can be fixed. If you own your home or other property, a home equity loan may be your path to good credit and fewer credit headaches.
This kind of mortgage is officially known as a HELOC or Home Equity Line of Credit and, as the name implies, that’s exactly what it is. A home equity mortgage is a line of credit using the value of your home or other real estate as security that the loan will be repaid. This credit system works exactly like a credit card with the only difference being you secure the line of credit with property you already own. It’s an excellent tool for repairing bad credit.
The interest on a home equity loan may be set at either a fixed or an adjustable rate. The exact details will, of course, have to be worked out with your lender, but for getting a handle on your bad credit situation, a home equity loan offers a number of benefits. Check this out: one major benefit of these loans is that the interest is usually tax deductible. Bonus!
To secure a home equity loan with bad credit, you will probably have to jump through some administrative hoops. One is that you will probably have to have your home (or other property) appraised. This will determine how much your home is worth and how much you still owe on the property. The difference between how much you owe and how much it is worth will be the primary determining factor as to how much you will be allowed to borrow.Unlike a complete refinance of your primary mortgage or taking out a second mortgage, you will probably not have to pay any points on this type of loan. Points are lender fees often charged on real estate loans. One point is equal to one percent of the loan amount. If you are charged one point on a $100,000 loan, you pay $1,000, and so on.
It’s probably a good idea when going after a home equity loan with bad credit to talk to your banker and the lender who holds the first mortgage. This is to just get an idea of what’s available, do not sign any papers at this time. Once you have this information, go online to see how their rates compare.
There are many avenues to rebuilding bad credit, but if you own property – especially your own home – you probably will qualify to take advantage of a home equity loan.
by startremodeling.com