No Credit History Home Equity Loans

Homeowners looking for no credit history home equity loans may be able to find a program that is suited to them. One reason is because the loan uses the equity built up in the home as a form of collateral. A home equity loan is usually a fairly large amount of money that is often used for a big ticket expense like college or home renovations. Many lenders do look at the applicant’s credit and take it into consideration before granting them a loan. However you can find companies that advertise bad credit and no credit home equity loans.

The fact that you are a homeowner establishes that you must have some credit, which would be the home you own. While you can find mortgage lenders who will grant mortgage loans to people with bad or no credit, your credit is still bound to improve as you make your monthly payments. And with equity as collateral, it is easier to get the money you need. Equity is the amount of money you have paid towards your mortgage minus the total cost of the mortgage.

You may hear a home equity loan referred to as a second mortgage, although that term is not used much these days. The longer you have been paying on your mortgage, the more equity you will have acquired. And, if you are looking to borrow less than the total amount of your equity this makes your chances even better. Because real estate equity is considered a good form of collateral, finance companies, credit unions and banks will usually be able to offer reasonable rates on these types of loans. You should know that the rates will still be higher than they were with the initial mortgage loan. Home equity loans can also be refinanced.

One alternative to no credit history home equity loans is the reverse mortgage. This is much like an equity loan but rather than getting the money all at once you receive it in payments sent each month or each quarter. Many senior citizens who need additional income but do not want to give up their homes go for this option. Homeowners of any age may want to think about a reverse mortgage depending on their financial needs.

So in review, no credit history home equity loans are possible to get, but the very idea of a homeowner having no credit is unlikely. Even if your credit is bad, owning a home can help improve it, especially the longer you pay on your mortgage. Shop around and talk to different lenders to see what they advise and what they have to offer before choosing who to apply with.