You are more likely to be able to get a home equity loan than a regular loan. In a home equity mortgage, the amount you borrow is secured by the amount of equity you have in your home. When applying for a mortgage, there are a few important things to keep in mind.
Don't fall into these three traps with a home equity loan.
- Not giving your broker or lender credit information
This is the worst thing you can do when you're trying to get a mortgage. If there are bad things on your credit report, be honest about it and explain how they got there. You are more likely to find a lender who can work with you and understands your situation. But if you make a claim that can't be proven, it's more likely that your whole credit history will be looked at and any bad points will be brought out. If you are honest about your situation and can give a good reason for why you have bad credit, you might be able to negotiate a low-interest home equity loan.
- Lending companies checking your credit score dozens of times
When a lender asks one of the three credit rating companies for information about your credit, your credit score goes down. Even though it's a good idea to shop around for the best deal, be careful about getting a quote from a company for a home mortgage based on your credit score, since they won't check it themselves. Avoid a company if it declines to give you a quote as per your requirement. You can look at the costs of the different loan and mortgage products by comparing them.
- Doing business with people who are not honest
There are many home mortgage scams, and most of the people who fall for them are either very old or have very little money. They will try to sell you mortgage products that you can't pay for. They also try to get you to buy their product in different ways. There are different warning signs that you should pay attention to. They usually tell you to list your income as much higher than it really is, tell you it's fine to get a mortgage with higher monthly payments than you can afford, and try to get you to sign forms that haven't been filled out. They will also try to get you to sign without reading the terms and conditions.
If you avoid the three mistakes listed above, you may be able to get a cheap mortgage and better terms.
