Bad Credit Home Equity Loan
Finding a home equity loan can be a challenge, but under the right circumstances it can be very useful. A borrower who has a less than sterling credit history can use a home equity loan to consolidate consumer debt, take care of home repairs, or even remodel their existing home. In addition, home equity loans can even be used to improve bad credit by making timely payments on the loan.
What is a home equity loan?
A bad credit home equity loan is a type of consumer loan that is secured by a second mortgage, allowing the consumer to borrow against their equity in the home. The value of the loan is based on the difference between the equity the borrower has in the home and the current market value of the home. The mortgage also provides collateral for an asset-backed security issued by the lender and sometimes tax deductible interest payments for the borrower.
A home-equity loan is basically a line of credit secured by your home. When the line of credit is drawn down, the financial institution providing it places a second mortgage loan on your home until the loan is paid off, after which the you can use the loan to finance other purchases. However, if the loan is not paid off, your home could be sold to pay off the remaining debt. Interest rates on such loans are usually adjustable rather than fixed and lower than standard second mortgages or credit cards.
Contact HML Investments today to speak with a specialist for more information regarding bad credit home equity loan.