Home Equity Loans for People with Bad Credit - Reasons for Getting a Home Equity Loan
November 26th, 2008
Home equity loans allow people with bad credit to access relatively cheap credit. By tapping into your home’s equity, you can afford to do home repairs or pay for college. Home equity loans can also help you get out of debt sooner by consolidating your bills. And in some cases, interest from your home equity loan is tax deductible.
Cheaper Type Of Credit
With the equity of your house as security, a home equity loan provides you with one of the cheapest types of loans. With poor credit, credit cards rates can be 20% or higher. Unsecured personal loan rates can be just as much. But sub prime home equity rates are 1% to 8% higher than conventional rates.
Many people decide to use their equity to pay for large expenses, such as home repairs or college bills. You can also pick a home equity line of credit, which allows you to borrow against your equity much like a credit card account.
Consolidate Other Bills For Lower Rates And Payments
A home equity loan can help you get out of debt sooner by consolidating your bills into one payment with a low rate. Trading in your high interest credit card bills for a low interest home equity loan can save you hundreds a month.
When you select your second mortgage terms, you can negotiate loan terms. You can target your loan’s length to the payment amount. This means that for the same monthly payment you have with your bills now, your loan could be out of debt in less than five years. Of course, you can choose a longer period for smaller monthly payments.
Interest Can Be Tax Deductible
In some cases, home equity loan interest can be itemized on your taxes. If the principal was used to make home repairs, then the interest qualifies. But check with the IRS before including it on your taxes.
Under the right circumstances, a home equity loan can be a valuable tool. However, make sure you do your research on lenders before signing any loan contract. A few hours spent researching rates and fees can save you a real bundle.
View our recommended Bad Credit Home Equity Loan lenders.
Tags: credit equity home line mortgage, texas home equity loan rates, home equity loan interest deduction, mobile home equity loans, best home equity loans, home equity line bad credit, bad credit equity home loan, home equity conversion mortgage
Tags
Entry Filed under: Home Equity Line of Credit
3 Comments
1. Credit Crunch » Hom&hellip | November 26th, 2008 at 9:43 pm
[…] The Grumpy Republican wrote an interesting post today onHere’s a quick excerptTip! Reverse Mortgage - Retirees remaining in their homes can still tap their home equity as a source of retirement income. An entire industry has grown up around the ‘reverse mortgage’ concept which allows seniors over 62 to tap into their home’s value without making any repayments during their lifetime. Home equity loans allow people with bad credit to access relatively cheap credit. By tapping into your home’s equity, you can afford to do home repairs or pay for college. Home equity loans ca […]
2. Home Equity Loans for Peo&hellip | November 26th, 2008 at 10:05 pm
[…] Original post: Home Equity Loans for People with Bad Credit - Reasons for Getting a Home Equity Loan […]
3. Home Equity Loans for Peo&hellip | November 27th, 2008 at 5:41 am
[…] posted here: Home Equity Loans for People with Bad Credit - Reasons for Getting a Home Equity Loan bills, calendar, copyright, credit, equity-loan, home contractor, home-equity, […]
Trackback this post