Reader’s Question:

Is it still possible to take out a home equity loan even if I have a bad credit rating? I’ve moved to Carrollton, Texas recently and would want to take out a loan for some financing needs, please advise.

Myers

Carrollton, TX

Contrary to popular belief, there are still many lenders out there who are willing to extend you a loan offer even if you have a less than stellar credit score. Do keep in mind though that having the loan offer you might get might have a higher than usual interest rate due to the fact that people with not-so good credit ratings, or have histories of bankruptcies or delinquencies, are considered high-risk customers.

In your case, if you are willing to place your property or mobile home up as collateral, than you may have a better chance of getting a loan. Usually, lenders will evaluate your loan request by looking at three things, how well you will be able to keep up the payments for the loan, your credit score per se and collaterals that can be used to minimize the risks on the lenders end. There is no reason, however, for you not to shop around and look for lenders who are willing to extend equity loans against your property in Carrollton, Texas. Do compare rates and offers, have at least three options to evaluate, but make sure you also understand the fine print before accepting a home equity loan. Some lenders may only be willing to extend you a loan if you agree to let them hold the deed to your premise during the loan term.

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