Getting a Home Equity Loan When You Have Credit Problems

Can you get a home equity loan when you have credit problems? Yes. And you can get relatively low rates if you are a smart shopper. Subprime home equity loan rates are just a couple of points above the average prime rate of 7.65% in May 2007. You may even find that despite your credit problems, you can still qualify for prime rates.

Credit Problems And Home Equity Rates

Credit problems dont necessarily bump you into subprime loan status. Even with a bankruptcy or foreclosure on your credit report, you may be eligible for prime rates if its been at least three years.

Each lending company has their own criteria for determining home equity loan rates. Your credit score is part of the decision process, but so is your income, length of employment, and the pecent of home equity you have built up. So some lenders might offer you prime rates, while others will quote you a subprime loan rate.

Types of Home Equity Loans

Keep in mind that there are two different types of home equity loans. Long term loans with either fixed or adjustable rates are often called second mortgages. These secure loans will have cheaper rates, but they may be more expensive with their long terms.

Home equity line of credit, also called HELOC, always have adjustable rates with terms around five years. These loans are the easiest to qualify for. And since they give you an open line of credit, you can borrow as you need to. So you only pay interest on the amount you have used.

Lower Home Equity Rates

Lending companies want to do business with you, even with your credit problems. They are competing for you business with lower rates and fees on all their loan products. So do some comparison shopping to find the best deal for your credit situation. With most lenders online, you can have loan quotes emailed to you in a matter of minutes.

Recommended Home Equity Lenders Online for Poor Credit Borrowers - We maintain a list of low rate mortgage lenders and update the list frequently. Try applying with one of our recommended lenders first.

Mortgages After Bankruptcy- Read this article to learn the answers to some Frequently Asked Questions about Mortgages After Bankruptcy.

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