Home Equity Loans: How It Works
When you are short on cash and your credit rating is less than stellar, banks and other financial institutions are likely to turn your loan request down without a second glance. It might seem impossible to get out of your situation when if you just had a bit of help, you could change your financial position and improve your life. The solution to your situation lies in bad credit home equity loans.
What Are Home Equity Loans?
Home equity is the difference between the appraised value of your home and any existing mortgages or loans you have against the property. For example, if your home is worth $200,000 and you owe a total of $125,000 against it, your equity is $75,000. If you have a bad credit rating, private lenders such ourselves at BMC Mortgage & Investments offer loans against the equity of your home that can help you live a better life and get the money you need.
How Equity Financing Works
In order to determine how much you can borrow for your bad credit home equity loans, you will have to provide proof of the value of your property and any mortgages or liens registered against it. In most cases, a property appraisal and tax assessments are the means used to establish the value. Your mortgage broker will calculate your equity as stated above and determine your loan to value ratio (LTV). This ratio is used to determine what percentage of your equity you may borrow.
Your Money Used Your Way
Bad credit home equity loans use your property as collateral, meaning if you default on your loans, your home will be sold to recover the money. Before securing such a loan, it is critical to make sure you can afford to pay it back. That aside, the money you borrow is yours to use as you see fit. Unlike other types of home equity loans, you are not required to make home improvements or consolidate your debts.
If you are a home owner with bad credit, it is easy to find out how much you qualify for in bad credit home equity loans. Call or contact us at BMC Mortgage & Investments today and you could have your funds as soon as tomorrow.