Bad Credit Home Loans


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Qualifying for a home equity loan or refinance home loan with bad credit has become more challenging for homeowners with issues such as, low credit scores, and late payments on credit. 

Mortgage lenders who are offering bad credit home equity loans will usually adjust their interest rates higher to offset the risk. Getting a higher rate may not be too appealing, but it can be better than getting no offer of a loan at all. One compensating factor to get a better mortgage rate, is having a low loan to value.

Also, see FHA home loans for a high loan to value, or if you have bad credit issues.

With a credit score below 660, most bad credit home equity loan programs will not exceed 80% loan to value. However, there are bad credit home loans available with credit scores as low as 580. The mortgage rates increase as your score decreases, especially without much equity.

If you have any collection accounts, the mortgage lender will normally require them to be paid off. Consumer credit counseling is typically not allowed within the last 2 to 5 years, and a previous bankruptcy may not be allowed within the last 2 to 7 years. Also, your mortgage payments must be current, and usually no mortgage late payments over 30 days within the last 12 months. 

In qualifying for a home equity loan or second mortgage, lenders use the middle of 3 credit scores from the person on the application who makes the most money. If necessary, you can exclude a spouse from the application to avoid a problem, they would have to temporarily quitclaim off title.