Monday, 3 June 2013

Resorting To Home Equity Loans with Bad Credit

Remodeling our home was long and arduous, full of decision making and negotiating. Numerous problems arose, and we ended up needing to do more than we had planned. We needed twice the materials we started with, old fixtures could not be reused, and my wife’s entire kitchen had to be broken down. The best opportunity for a loan we had was with a home equity credit. This ended up working in our favor because the value of the house increased with our addition.

The Home Equity Line of Credit Concept

My wife and I were at loose ends with a mound of bad credit on our laps. Our reports were abysmal, juggling car and medical payments. Having eight kids is like living on the edge. It’s even worse when your house is unfit to contain everyone. Luckily our mortgage payments had been current. A friend suggested that we look into home equity line of credit for this new remodeling project. Home equity is the value of the house against the amount that is currently owed. It can be calculated by subtracting the amount owed from the value. Establishing a line of credit with a home equity loan gives the lender a solid form of collateral; the entire house, as a guarantee against default.  Also known as a second mortgage, payment options can come either with a fixed monthly rate or a changing, adjustable rate. representatives can determine whether a consumer should take an adjustable rate mortgage option, in which the loan is paid in piecemeal, and the interest rate on monthly payments changes, or a fixed interest rate mortgage option.

Finding a Lender

With our bad credit, there was an appreciable risk to borrowing against the repossession of the house. We had to search around to find the lender with the best interest rates. Most gave us a high interest rate because of our credit. Applying for a homeequity line of credit with bad credit will put most up against this inconvenience, despite having the house as collateral.

Home Equity Line of Credit with Bad Credit

Most will want to look further into the home equity process with bad credit hanging over their heads. If payments defaulted and suddenly we could not keep up, the lender would have to foreclose our house once it was finished being remodeled. We were reassured by a friendly Representative, and took careful note of their direction in case our second mortgage fell through.

Some people may need to hold off on taking this kind of loan. They may feel the risk of letting payments get out of hand or defaulting would be too great. These people might want to get their finances in order before finding the best home equity line of credit available to them. Real-Estate-Yogi can work with consumers by helping them manage their credit giving advice on loan rates before searching for lenders.

If you’re unsure about home remodeling or any other item that a home equity might adequately support, can provide personnel with knowledge and intuition on both finance and real estate.  Call 1-800-987-1397 for a free consultation.

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