Without perfect credit, you can use your home’s equity for your
financial needs. No matter what your credit score, you can find lenders
willing to work with you, and at reasonable rates. You can access your home’s value in two ways, either through a home equity loan or a reverse
mortgage. Each is designed for a particular need and have their own pros and cons.
Home Equity Loans – Paying Yourself Back
The most common route for tapping equity is to apply for a home equity
loan. You can receive a lump sum payment with a second mortgage, or
draw on funds as needed with a line of credit. Often a home equity loan is
a person’s cheapest form of credit, especially with a poor credit
history.
You also have a number of options when it comes to loan terms. You can
select a five to thirty year loan, fixed or adjustable rates, or
interest only.
Home equity loans are designed for people planning to pay back their
loan. So when you sell your home, you will be able to get your investment
back, hopefully with some appreciation. You also have the tax benefit
of deducting your interest.
Reverse Mortgages – Taking Your Money Now
Reverse mortgages also allow you to get your equity either in a lump
sum or in small payments. With a reverse mortgage, you can use it to make
home repairs, pay for living expenses, or compensate for medical bills.
Reverse mortgages are almost exclusively for people 62 or older.
Repayment is due when the home is no longer your primary residence. And since
no payment is due until then, loan approval is easier.
When looking for a reverse mortgage, pay attention to the fees. You
want to make sure that you are getting the full value of your home,
especially if it appreciates.
Guidelines For Working With Lending Companies
When looking for a mortgage, be cautious when reviewing claims. Make
sure that you get specific numbers on rates and fees before accepting any
contract. You also want to compare offers from several different
companies to be sure that you are getting a fair deal. And don’t be afraid to
ask questions; they are there to help you.
Try using one of ABC Loan Guide's Recommended Poor Credit Home Equity Loan Lenders.
View our recommended lenders for a Home Equity Loan. Also, view our recommended Mortgage Brokers online.
