You can get a home equity loan, even if you have faced bankruptcy or have a bad credit rating. There are institutions that cater to this segment, however, interest rates and terms tend to be stiffer. Additional amount could also be charged. The lender can offer high payment and lower interest, or vice versa. Loans with both fixed income and equities are available. The maximum repayment time can be up to thirty years.
Generally, lenders will depend on the reports of credit rating agencies such as TransUnion, Equifax and Experian, together known as FICO, to assess an individual’s credit rating on a scale of 300 to 900. The factors considered by these agencies include payment history, recent credit applications and the outstanding debt. A score below 600 indicates that you are in the bad risk group. It is possible that the classification of the same person nominated by each agency can be different.
There are ways and means to improve the FICO score. Some banks also offer credit counseling. Agencies approved by the U.S. Department of Housing and Urban Development (HUD) also give free advice, including review of your financial situation. Some lenders do not even bother with FICO scores. In such cases, the maximum loan amount would be only 70 percent of net worth. They can insist that the borrower pay some of the outstanding debt with borrowed money.
Do some research and see what different lenders have to offer. Do not blindly believe everything they say. Study them, ask questions, no need to feel shy about your current financial situation. And be careful. s.
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