Financing Home Improvement Using Second Mortgage Loans With No Home Equity And Bad Credit

Guaranteed Home Improvement Loans For Bad Credit

More important than buying new carpets or home furnishing, home owners need to carry out regular repairs in order to protect their home’s values and avoid a small problem in the leaking roof or pipes from escalating into a major costly issue to rectify. Many home owners are tight on cash due to the poor economy or loss of jobs, however it is important that you get guaranteed home improvement loans for bad credit or unemployed to correct any problems in your home structure immediately. To do so, an easy way is to considering borrowing against the home equity you have earned so far in your home to finance these remodeling and repair projects. On the other hand, some homeowners need a way to get a second mortgage with little or no home equity.

A second mortgage can be used for financing home remodeling and improvement projects especially when you can only have access to higher interest rate loans due to poor credit. By keeping the initial low rate you have on your first mortgage, just add a second mortgage loan secured using your property. The advantage of using 2nd mortgages or a home equity loan is that you only pay very low or no closing costs. You have two similar choices to finance your home improvement using your house as the collateral – a home equity loan or a home equity line of credit (HELOC).

For the first option, you get a lump sum of cash at a fixed interest rate which is suitable for major home remodeling projects that requirement significant down payment. When you want to carry out a series of long term home improvement works, a home equity line of credit may be better since you can withdraw money when its needed against a big credit limit with variable interest and flexible pay back. Both secured home financing offer the same tax advantages, and you can arrange for long term payment schedules with the lender so that it is easy to handle a smaller monthly payment.

When you have already taken second mortgage previously, you can also ask your lender you want to finance your home improvement using a cash out refinancing with lower interest rates, which is what many home owners have done to convert an adjustable rate mortgage to fixed rates. In this case, you replace the existing home loan with a completely new mortgage and take out some cash from the existing equity to pay for the home repairs and improvements. This is a more flexible option since you can change to fixed rates, variable rates, or interest-only mortgage etc at the same time.

As you can see, it is easy to get $20000 home improvement loans with bad credit since you can use borrow against the equity you have in your property. What is important is to carefully estimate your total house remodeling costs against your income and affordability before you take out a second mortgage. Make sure you can afford the additional loan payments every month until they are fully paid.

If you are extending your home mortgage, make sure you will be able to remain in employment so that you have income for the monthly payments. You will not want to risk losing your house for the sake of borrowing money to make it more beautiful. As long as you make realistic and conservative budget planning, you can get all the necessary repairs, renovations or new furniture to decorate the dream house you always wanted for the family using easy home equity loan or credit line.

Where To Get Second Mortgage With No Home Equity

For some homeowners with little or no equity in the house, it will not be as easy to get second mortgages or home equity lines of credit up to $10000 since the banks or home improvement loan companies will only approve if you have sufficient home equity available. The solution is to look for legit lenders that give home equity loans over 100% of your current home value.

However, the approval rates are low because of the new guidelines and restrictions on such 125% home equity loans are very strict. In fact, we do not recommend you take such loans because you are at greater risk of losing your home this way. It will also be very difficult to sell your home within the next 5 to 10 years since you will be owing more money than the house is worth.

If you cannot get a big $20000 loan to cover all the home remodeling ideas you have in mind, rethink the whole plan and choose only the essential repairs that are necessary to protect the value of your home. Usually, you do not need a lot of money for such home repairs – sometimes $5000 is enough to cover all expenses quotes by the local handyman. See if you can get a small cash loan from friends or ask your local bank or credit union for a small home improvement loan with no equity.

Many states and communities have some free home improvement grants available to help home owners who cannot afford to pay for expensive repairs or cannot qualify for bank loans due to bad credit. Try calling the county or city planning office if they can provide financial assistance or loans. Note that there are usually some criteria such as low income or senior age etc in order to qualify for such home repair loans and grants.

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