Home Equity Loans for People with Poor Credit – Get a Hassle-Free Home Equity Loan

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Even with poor credit, your options for getting a home equity loan are
numerous. Home equity loans are different from other types of personal
loans. For starters, these loans are secured. Lenders prefer this
factor because it’s easy for them to recoup their money if the loan
defaults.Understanding Home Equity Loan OptionsWhen applying for a loan using your home’s equity as collateral, there
are several options. Homeowners with poor credit may take advantage of
a home equity line of credit. Similar to credit card cash advances,
homeowners are approved for a line of credit up to a dollar amount not to
exceed their home’s equity. Homeowners are free to withdraw funds as
needed. The money can be used to payoff debts, repair an automobile, or
make home improvements.On the other hand, a home equity loan is disbursed as a lump sum of
cash. Similarly, the funds may be used for large expenses or major home
repairs. Both home equity options must be repaid. Home equity loans have
fixed terms, whereas home equity lines of credit are available for a
specific length of time.Pros and Cons of Home Equity Loan OptionsA home equity loan and line of credit are beneficial because they
provide extra cash when you need it. Furthermore, if you have bad credit,
maintaining regular payments will boost your credit score. If the funds
are used to consolidate debt, homeowners can get on the road toward
becoming debt free and boosting their credit score. In fact, many people
obtain a home equity loan as a means of improving their credit rating.The pitfall most common of home equity loans is the inability to repay
the money. Sadly, some people cannot handle credit or money
responsibly. Thus, once debts are consolidated or paid off, some people accumulate
additional debts. The smart maneuver would be to close paid accounts,
which would alleviate the temptation to use a credit card.After incurring additional debts, some people are powerless to continue
regular payments. If you acquire a home equity loan, there are multiple
liens against your house. Consequently, either lender may foreclose. By
defaulting on either loan, you risk losing your home.Current Mortgage Lender vs. Sub Prime LendersWhen choosing a mortgage lender, do not rely on your current lender to
offer the best rates. Getting a quote from your lender is ideal;
however, you should also request quotes from new lenders. Banks or credit
unions will not offer the lowest rates to persons with poor credit.
Nevertheless, you can attain comparable loan rates by using a lender that
specializes in bad credit loans. Sub prime lenders have convenient online
applications and instant approvals. If using a mortgage broker, you
will receive several sub prime loan offers within seconds.