If your credit score isn’t up to par, you may anticipate having a difficult time using that bad credit to obtain a home equity line of credit.
Pittsfield, MA -- (SBWIRE) -- 09/24/2013 -- Real-Estate-Yogi.com can help you discover alternate ways to obtain a home equity line of credit for less hassle.
1. Different Lenders
2. File for Bankruptcy
If you are looking to take out a home equity line of credit with bad credit, you will not be able to work with traditional, well-known lenders. Those big companies are much more protective of their money and investments, and do not trust people with bad credit, as a general rule.
Instead, you will have to look for smaller lenders that make a business of working with people with a credit score of 660 or lower. Your chances of getting a home equity line of credit for bad credit are much greater this way. Unfortunately, you will wind up paying more in interest when you work with these lenders. It’s how they protect their own investment and your loan, should you default. Essentially, giving a loan to someone with poor credit is a risk. The lower the score, the higher the risk, and therefore, the higher the interest rate. But if your credit is especially low, this may be the only way to get the loan.
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File for Bankruptcy
Another way to obtain a home equity lines of credit for bad credit is to file for bankruptcy. Most believe that you cannot do this if you are bankrupt, but this is not the case. If you file for chapter 13 bankruptcy, there are options available to you over time. For example, for a home equity line of credit, you may have to wait 3 years after filing bankruptcy to take out the loan. During the three year wait period, you likely will have to continue improving upon and building your credit as well.
Other lenders may not make you wait after filing for bankruptcy to apply for a bad credit home equity line of credit. These non-traditional lenders may charge different fees, higher interest rates, or regulate how much credit you may be given. Even after filing bankruptcy, giving you credit is still a risk for these lenders. Your monthly payments will likely be higher and under a more strict watch.
Regardless of whether you work with non-traditional lenders or file for bankruptcy, the best bet is to always work to build your credit score and increase your rating.
If you have bad credit, but want to apply for a home equity line of credit, www.real-estate-yogi.com can help. In addition to our online database, which connects you to experts in the real estate field, you can also reach us 24/7 by phone at 800-987-1397. Our associates are standing by to take your questions, or help you schedule a free consultation.