Getting home equity loans with bad credit is not really a big deal. In reality, this is easier than you might think. This article contains some information that will help learn some of the the hows and whys invovled in getting home equity loan with bad credit.It is commonly assumed that if you have bad credit, you will not quality for loans. Be it auto loans, personal loans, construction loans or home loans etc. This is not necessarilty true, especially when it comes home equity loans with bad credit. Home equity loans borrows from the equity that you already possess in your home. Most of the creditors or lenders, however you call them, they are actually more than willing to take this risk of providing you a loan even with bad credit. Why? That’s because they know that, if required, they will still be able to take over your home and get their money so for them it’s a pretty safe game isn’t it?If you are concerned about getting home equity loans with bad credit then here is some information that will help you feel better and be less worried:Getting approved for home equity loan is easy.Even if you have a bad credit, qualifying for home equity loans is not that hard. The only thing your bad credit score will do is that it makes sure that you end up paying higher interest rates than you actually would if you had a good credit score. While this may not sound pleasing but it is better than not qualifying for the loan at all.Creditors want business with youA number of lenders are out there who will be looking forward working around your credit issues and problems. In fact, the majority of the lenders today, known as sub-prime lenders are out there, waiting for people like you and with issues like you have, to come and get in touch with them. You can find such sub-prime lenders online by doing a little search on different search engines or by browsing through our website. The sub-prime lenders specialize in getting loans for people who have bad credit. If you work with these kind of lenders, you will increase your chances of getting approved quickly and finding a home equity loan program that suits your financial situation and needs.
Do you have less than perfect credit? Good news this company gives some leeway even if you have filed for bankruptcy. The minimum credit score you can have is 500. This was recently changed from a no minimum. There is a minimum down payment of 3.5% of the homes perches price. To help you pay This company will allow the use of state or local government assistant programs to help. This is by far the most flexible program.There are great benefits to this type of loan Modification company. One is that closing costs may be covered. Home sellers,builder and lenders pay some or all of the borrowers closing costs such as appraisal, credit report, and title. Lenders typical charge higher interest rates on loans they pay the closing costs on though. Other benefits include:lower monthly payments and interest rates, better terms(15 to 30 years) and equity building,streamlined paperwork that reduced documentation,low down payments,cash out options for other expenses and debt consolidation, this is called a 203(k) and is based on the value of the home once repairs are done, more access to other credit lines and little to no out-of-pocket expense needs.There are four conditions however, that borrowers need to satisfy. You have to have lived in you home for at least a year before cashing out refinances options previously listed. The refinance amount you qualify for is determined by the appraised value of your home. If you have an original mortgage and a 2nd mortgage you will have to show that so they can take them into consideration. Also if you have a FHA streamline loan the existing mortgage would be paid off with a new refinanced loan and no cash is granted. There are 2 mortgage insurance premiums required on all FHA loans:the upfront premium and the annual premium. The upfront should be paid then the borrower get the loan but, can also be financed as part of the loan. The annual premium will be paid in chunks. 1/12th of the amount will be paid each month with the mortgage payment. Compare this to a non-FHA loan and this will still be the best way to go.The FHA provides 4 types of home refinance loans. There is a cash out refinance loan that allows you to refinance 85% of the appraised value of your home. There is also a cash our refinance option that allows you to refinance 95% of the appraised value of your home. Both of these allow you to wipe away your high interest debt to get a clean start or pay for other expenses such as medical debt, home improvement, student loans or any other major expenses that you might have. There is a no cash out refinance loan alternative. This can eliminate upfront costs by rolling all related closing costs, financing costs and prepaid items into the new loan amount. Finlay there is a FHA stream line loan. This option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and oftentimes without an appraisal. This also cuts down on the amount of paperwork that will be completed by your lender saving you time and money.Remember when researching that FHA is not a lender but rather an insurance fund you need to get on your loan. To get this insurance on you loan you must get your loan threw FHA-approved lender rather then from the FHA its self. So you will need to look up and approved lender in your area. Make sure your trust this lender.
There are a couple of reasons to consider refinancing. You may need additional cash right now in order to pay for a real need, such as paying college tuition or even remodeling your home, or buying a car (if you pay cash because of a ‘cash out’ refinance loan your mortgage interest is tax deductible…for now) or you may want to take advantage of the much lower interest rates that are available now. The VA has options for both of the above reasons.The first option is a VA Loan for Home Equity Refinancing. This refinance transaction requires repayment of your current mortgage directly from the proceeds of your new VA mortgage. This will be for the same borrower for the same property as on the original loan. A home-owner can refinance up to 90% of the appraised value, plus all closing costs, provided the property can stand up to the designated loan to value ratio. You do not have to own your home for any minimum amount of time, but your home has to have sufficient equity to quality for the loan. Equity is the difference between the market value of your home and the amount you actually owe on it, which includes both your first and second mortgages. You can use the extra money (the equity) to pay off high credit card debt, buy a car, remodel or whatever you need the additional cash for.The second option is a VA Streamline Refinance, sometimes referred to as an Interest Rate Reduction Loan. The sole purpose of this loan is to gain a lower interest rate in order to save money, not only on your monthly mortgage payment, but ultimately over the life of the loan. This program was created by the VA to make this happen with little or no out-of-pocket expenses for the home owner. Either the lender can pay the associated costs in exchange for a slightly higher interest rate or you can roll the closing costs into the new loan. The basics of this program are as follows:
This is only available to veterans who are refinancing their original VA mortgage and who have utilized their original eligibility for their current loan.
No assumptions are allowed
The homeowner cannot receive any cash back from the transaction.
All other liens must be subordinate to the VA’s lien.The VA will not require an appraisal, income or employment verifications, a credit report or a current termite report. The first qualifying criteria is that the current mortgage must have been paid as agreed for the prior 12 months and must not be in arrears at the time of the refinancing.As of July 15, 2010, the VA National Average Interest Rate was 4.617% APR for a 30-year fixed mortgage and 4.704% APR for a 15-year fixed mortgage. If you are currently paying at least half a point more in interest, this may be a viable option that can save you significantly, both on your monthly living expenses and over the life of the VA loan. You can also buy down the loan interest rate by paying points, which could make this an even more lucrative option.To get started, either contact your current lender, or another lender of your choice. This could easily be one of the smartest decisions you will make and the VA has made it so much easier for those eligible persons than what a non-veteran faces with the current economy. What are you waiting for?
In 2009, the mortgage bailouts continued with a new home refinancing program designed to aid struggling homeowners who have not been able to qualify for traditional refinance loans due to declining property values. Unfortunately, the recent housing crisis eroded the home equity for millions of homeowners. The Home Affordable Refinance Programs rolled out new government refinancing options that became available to a large sector of borrowers. HARP is part of the Obama mortgage plan that helps Americans reduce their loan payments or alter their current mortgage to be able to stay in their home and avoid foreclosure.This latest government refinance initiative offers unique advantages over conventional home refinancing because it requires no equity. In fact the home values have depreciated so significantly that the latest Obama mortgage plan enables borrowers to refinance their mortgage up to 125% of the property’s present value. The 125 loan plan aims to refinance borrowers into lower mortgage payments.HARP Loan Qualifications: The Home Affordable Refinance Program allows a homeowner to refinance their current mortgage as long as the home is used for primary residency. The homeowner must be current (less than 30 days late in the last 12 months) with their existing mortgage and the mortgage must be insured by one of the mortgage companies that are backed by the government (Fannie Mae or Freddie Mac). The home must have been purchased before or on January 1, 2009 to qualify. The home’s value must also have dropped causing the homeowner to not be able to refinance using conventional loans.HARP loan limits have been set at $417,000 for the time being. There is a vast group of Americans that owe more on their mortgage than their house value is worth after real estate values dropped. Another group of Americans are not “upside down” in their mortgage, but they cannot refinance conventionally because refinancing 80% (% most lenders use) of the home’s current value does not allow them to even pay off the existing mortgage.The Home Affordable Refinance Program may finally be the solution that many Americans have been looking for. Past government refinance plans like Hope for Homeowners and FHASecure were unable to help the average borrower refinance because they could not qualify due to lending program glitches. FHA refinance may still be a good fit for borrowers who have credit scores below a 620, but the borrower must be able to display compensating factors. Like conventional and FHA mortgage loans, pay stubs are required, and borrowers must be able to document that they have the ability to afford the new loan payments.
If you bought your home in the last couple of years in a hot market at a great interest rate, you may be wondering about the best way to cash out your equity. Maybe you need to consolidate debt or would like do some home repairs and remodeling. Leaving your 1st mortgage loan at the current low rate makes much more sense than refinancing at a higher rate, but how do you get to your equity? A home equity loan or home equity line of credit can be a great alternative to a refinance of your current loan.Home equity loans can work as a cash out second mortgage, giving you access to up to eighty percent of your available equity at once. A standard home equity loan generally has a fixed mortgage rate, meaning a fixed payment that you can depend on monthly. The payments may be higher than a home equity line of credit at first, especially compared to a line of credit with an interest only payment period, but you can be certain of how much you are paying monthly down the road as well. An adjustable rate mortgage in a market with rising interest rates may be liability for some, but if you are planning on paying back your loan quickly it may be a better option than credit cards. Also some mortgage products allow you to convert your home equity line of credit into a fixed-rate home equity loan at the current rate.A home equity line of credit (HELOC) is another way to access your equity, but it works more like a credit card. A HELOC is a revolving account that can be utilized as needed during the draw period and paid back in monthly installments or all at once. These loans have a variable interest rate and work as an adjustable rate mortgage. Generally, however, the interest is better on a HELOC than a credit card because it is a secured loan. Even better, consumers with home-equity loans can frequently deduct interest payments on their federal and state income taxes. Credit card interest however, is not deductible. “In effect, the tax deduction lowers the interest rate,” states Keith Leggett, senior economist for the American Bankers Association. Either of these loans may be a better option than refinancing in today’s market. Be sure to find a lender you can trust and fully discuss all your options.