Take the time to brush up on how a home equity loan works that way you can save time and money in the long run.
Understanding your credit situation is important that is why we want to help you so you can get the home equity loan that you need!
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How Bad Credit Home Equity Loans Work

Before you apply for bad credit home equity loans, learn more about how they work. We'll explain what these loans are and who makes a good candidate for them.

About Bad Credit Home Equity Loans

Equity refers to the present value of your home minus the outstanding balance on your current mortgage or other home loans. For example, if your home is worth $200,000 and you owe $180,000 on your mortgage, then your home equity is $20,000. Simply put, equity is appraised value minus debt. Bad credit home equity loans allow you to convert this equity into cash. You might use bad credit home equity loans for emergency cash needs, a child's education, or home repairs, for example. To get bad credit home equity loans, the value of your home must exceed the amount you owe on your mortgage.

Good Candidates for Bad Credit Home Equity Loans

If you have credit challenges and would like to convert home equity into cash, you would probably make a good candidate for bad credit home equity loans. Generally, you fall into the "bad credit" or "subprime" territory if your credit score is below 620. The people who will benefit the most from bad credit home equity loans are people who:

  • Have significant credit challenges, such as charge-offs, late payments, or bankruptcy
  • Have a credit score below 620
  • Own a home that is worth more than what you owe on your mortgage
  • Have little or no credit history
  • Do not qualify for traditional home equity loans

Types of Bad Credit Home Equity Loans

People with credit challenges have the following options for accessing the equity in their homes:

  1. Cash-out refinancing. Our lenders offer bad credit home equity loans in the form of cash-out refinancing, which allows you to refinance your current mortgage for a larger amount and keep the difference in cash. This option makes sense when the interest rate on the new mortgage would be considerably lower than that of your existing mortgage.
  2. Bad credit home equity loan. Bad credit home equity loans are ideal if you want to borrow a specific amount of money and make regular monthly payments over a fixed period of time (such as 10 or 15 years).
  3. Bad credit home equity line of credit. Another form of bad credit home equity loans is a home equity line of credit. This works much like a credit card, except the money is secured against your home. A home equity line of credit is best when you don't know how much you want to borrow, would like to pay back what you borrow sooner, or don't need the money immediately. You can even set up a home equity line of credit just in case you ever have future financial needs.

Do you know the benefits of an equity home loan?