Are you worried that bad credit might disqualify you from obtaining a home equity loan? Be not afraid. A H L Hard Money likes to explore creative ways to secure loans and manage debt so that you can still afford important purchases without becoming insolvent.
Improve your Debt-to-Income Ratio.
This is a simple calculation of your total debt load divided by your income; make sure it’s as low as possible. If you get it no higher than 40%, you’re doing well. If your credit score is low (or non-existent) because you haven’t used many debt instruments, you’re still in good shape because many lenders emphasize debt-to-income ahead of credit scores. Also, if you can devise a way to earn more money, this value can improve quickly.
Know how much home equity you have.
You may need to consult your bank to find out how much equity you possess, but that’s not hard, and this is a good metric to know. Homeowners can utilize as much as 80-90% of home value for borrowing purposes.
Shoot for a better credit score.
The average American credit score is 711, and you generally want to stay afloat with nothing below 620. Falling below that level is not a financial death sentence though. You can still secure loans but will likely incur higher interest rates. You can improve your score in three ways: 1) Always make payments on time, 2) Avoid new credit lines for the time being, and 3) Consolidate your debt.
Cash-out refinancing can help.
One of the services A H L Hard Money Network offers is something called cash-out refinancing. This is where you refinance your current mortgage AND take out cash from your equity simultaneously. The credit score requirements are not as steep, and it has the potential to drive down your interest payments. This approach helps you with everything from debt consolidation to home renovation costs, purchasing other properties, and paying back taxes.
A H L Hard Money Network routinely works with clients to amend their financial difficulties with strategies like these. If you find yourself struggling with high-interest rates or rejection from the banks over low credit, you don’t have to despair. Find out how we can help by calling (813) 516-5210.