Bad Credit Home Equity Mortgages - 5 Tips For Quicker Approval

Your house is one of your greatest assets - it is a shelter, it provides a place to entertain guests, and serves as a structure around which a feeling of home is built. It may serve as a resource for gaining access to much-needed cash too. The cash can be got by the homeowners via a home equity mortgage.


A home equity mortgage is known as a second mortgage also. It is a special type of loan designed for homeowners who want to convert a part of the equity in their home into cash. The resulting cash loan can be used to pay off high-interest debts like credit card debt. It can be used to pay for large, infrequent expenses like paying for a wedding or funeral, installing a swimming pool, doing home improvements, or going on a much-needed vacation.
Bad credit home equity mortgages are accessible if you know where to look. Here are 5 tips for quicker loan approval:


1. Calculate your current equity
To be able to take out a home equity loan, there must be equity in your home. To know how much you have to work with, deduct your current mortgage's outstanding balance from the appraised (or estimated) value of your home.


2. Know which LTV loan you could qualify for
A lot of 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 know which type of loan you need, do this simple calculation:
a. add your current mortgage's outstanding principal balance to the amount you want to borrow.
b. multiply the current value of your home by 80% (for an 80% LTV loan).
c. if the value in "b" is larger than that in "a," 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 the amount you can borrow and the type of home equity loan for which you will be putting in, it is time to know your current credit score. Reason: this will play a large role in the interest rate you will be offered.


4. Research at least 5 bad credit home equity mortgage providers
Don’t apply to a single lender, or you risk not qualifying for the lowest-possible rate because apart from your credit score, the lender you select will have an influence on the loan for which you can qualify. Keep in mind that you have a bad credit score so make sure to apply only to bad credit home equity lenders since they specialize in working with people with your credit type.


5. Negotiate well
As you apply to each lender, be sure to put negotiate well. Do not just lie down and take whatever offer each lender makes to you. Negotiate the best-possible offer you can get for your bad credit loan - even if this means going back let them know they will have to do better.
With these 5 tips, you would have quicker approval for your bad credit home equity mortgage loan.