Bad Credit Home Equity Mortgages - 5 Steps To Faster Approval
A person's house is one of their greatest assets: it serves as a shelter, provides a place to entertain guests, and serves as a structure around which a feeling of home is built.
It can also serve as a resource for gaining access to much-needed cash.
The cash can be accessed by the homeowners via a home equity mortgage.
A home equity mortgage is also known as a second mortgage.
This is a special type of loan designed for homeowners who want to convert some of the equity in their home into cash.
The resulting cash loan can be used to pay off high-interest debt such as credit card debt.
It can also be used to pay for large, infrequent expenses such as paying for a wedding or funeral, putting in a swimming pool, doing home improvements, or going on a much-needed vacation.
Bad credit home equity mortgages are attainable if you know where to look.
Here are 5 steps to faster loan approval: 1.
Calculate your current equity: Of course, in order to be able to take out a home equity loan, you have to have equity in your home.
To find out how much you have to work with, subtract your current mortgage's outstanding balance from the appraised (or estimated) value of your home.
2.
Figure out which LTV loan you could qualify for: Many lenders offer home equity loans such as a 70% or 80% LTV loan.
Some will even go up to 100% or 125% LTV.
What is LTV? It stands for loan-to-value.
To figure out which type of loan you need, do this simple calculation: a.
add together your current mortgage's outstanding principal balance and the amount you want to borrow.
b.
multiply the current value of your home by 80% (for an 80% LTV loan).
c.
if the result in "b" is larger than the result in "a," you can take out that size and type of loan.
If not, you will need to either borrow less or find a lender who offers a larger LTV loan.
3.
Determine your current credit score: Once you know how much you can borrow and the type of home equity loan for which you will be applying, next it is time to determine your current credit score.
Reason: this will play a large role in the interest rate you will be offered.
4.
Locate and research 5 or more bad credit home equity mortgage providers: Do not just apply to a single lender, or you will risk not qualifying for the lowest-possible rate.
For, in addition to your credit score, the lender you choose will have an influence on the loan for which you can qualify.
Remember, since you have a bad credit score, make sure to apply only to bad credit home equity lenders: they specialize in working with people with your credit type.
5.
Put on your negotiating hat: Now, as you apply to each lender, be sure to put on your negotiating hat.
In other words: do not just lie down and take whatever offer each lender makes to you.
Instead, negotiate the best-possible offer you can - even if this means going back to them and telling them they will have to do better.
Take these 5 steps to faster approval for your bad credit home equity mortgage loan.
It can also serve as a resource for gaining access to much-needed cash.
The cash can be accessed by the homeowners via a home equity mortgage.
A home equity mortgage is also known as a second mortgage.
This is a special type of loan designed for homeowners who want to convert some of the equity in their home into cash.
The resulting cash loan can be used to pay off high-interest debt such as credit card debt.
It can also be used to pay for large, infrequent expenses such as paying for a wedding or funeral, putting in a swimming pool, doing home improvements, or going on a much-needed vacation.
Bad credit home equity mortgages are attainable if you know where to look.
Here are 5 steps to faster loan approval: 1.
Calculate your current equity: Of course, in order to be able to take out a home equity loan, you have to have equity in your home.
To find out how much you have to work with, subtract your current mortgage's outstanding balance from the appraised (or estimated) value of your home.
2.
Figure out which LTV loan you could qualify for: Many lenders offer home equity loans such as a 70% or 80% LTV loan.
Some will even go up to 100% or 125% LTV.
What is LTV? It stands for loan-to-value.
To figure out which type of loan you need, do this simple calculation: a.
add together your current mortgage's outstanding principal balance and the amount you want to borrow.
b.
multiply the current value of your home by 80% (for an 80% LTV loan).
c.
if the result in "b" is larger than the result in "a," you can take out that size and type of loan.
If not, you will need to either borrow less or find a lender who offers a larger LTV loan.
3.
Determine your current credit score: Once you know how much you can borrow and the type of home equity loan for which you will be applying, next it is time to determine your current credit score.
Reason: this will play a large role in the interest rate you will be offered.
4.
Locate and research 5 or more bad credit home equity mortgage providers: Do not just apply to a single lender, or you will risk not qualifying for the lowest-possible rate.
For, in addition to your credit score, the lender you choose will have an influence on the loan for which you can qualify.
Remember, since you have a bad credit score, make sure to apply only to bad credit home equity lenders: they specialize in working with people with your credit type.
5.
Put on your negotiating hat: Now, as you apply to each lender, be sure to put on your negotiating hat.
In other words: do not just lie down and take whatever offer each lender makes to you.
Instead, negotiate the best-possible offer you can - even if this means going back to them and telling them they will have to do better.
Take these 5 steps to faster approval for your bad credit home equity mortgage loan.
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