Monday, September 28, 2009

Home Equity Bad Credit

By Peter Gitundu

Getting loans can sometimes prove to be a tricky affair, especially if you have bad credit. Many lenders will consider you a high risk borrower once you present your financial records to them. They might ask you to provide collateral for the loan. If you are a home owner, your chances are better off because you can apply for home equity loans which are more accessible to people with poor financial records.

The home equity loans can be used to do a number of things, including paying fees for your children. You can also take the loan if you feel that your home needs a facelift or needs general repair. The loans guarantee you a large lump sum, the reason being that your home serves as security for the loan.

The lender is therefore assured that they have something to fall back on when and if the borrower who has bed credit records is unable to repay the loan. The value of the loan is is most cases 75-80% of the value of your home. The repayment period is usually on a fixed term but the interest rates are lower as it is with other secured loans. The interest also happens to be tax-deductible.

Before you can apply for the home equity loans, you are advised to carefully look at your financial position and determine whether this is what you really need. You might find that there are better options than this, especially considering that your home is at stake and your credit records are not favorable. You also need to look at your current mortgage balance because it will go a long way in determining just how much you can get.

Peter Gitundu Creates Interesting And Thought Provoking Content on Finance. For More Information On How To Manage Loans, Read More Of His Articles Here: EQUITY BAD CREDIT. If You Enjoyed This Article, Make Sure You SUBSCRIBE TO MY RSS FEED! To Receive My Most Recent Posts & Updates.

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