Frequently Asked Questions

Can you get a home equity loan with bad credit?

In general, there are many circumstances in which you can get a home equity loan with bad credit. Certain government loans allow for credit scores down to 500 for a cash out refinance, and even more offer different loan programs for investment properties. The ability to get a loan is going to depend on other factors, such as what is affecting your credit most. Having mortgage lates in the past year will make it difficult for certain loan programs, but that does not mean there are not any options. Some loan programs don’t actually have a credit score minimum either, and instead rely on other qualifying criteria, such as equity available. If you browse the different loan options on the upper tab, such as the Private Home Equity Loan and Alternative Home Equity Loan sections, we have information about such loan programs.

Is there a mortgage for bad credit?

Similar to pulling cash out in a home equity loan or refinance, many mortgage options are available for purchasing a home with bad credit. FHA and VA loans tend to offer more flexibility than conventional loans if you are purchasing a primary residence, as conventional loans require at least a 620 qualifying credit score. However, when it comes to having bad or poor credit, a higher down payment will often be needed. When it comes to buying a rental property or an investment property with bad or poor credit, this is also the case. If you own multiple properties, and are looking to purchase a new investment property with bad credit, you may also be able to utilize equity in your other property/properties to assist with the higher down payment as well.

How to apply for a mortgage with bad credit?

Applying for a mortgage with bad credit does not have to feel like a daunting process. Loan officers will work hard to help you find a loan that you can qualify for, and that has a comfortable payment for you. When it comes to bad credit, it can be helpful to work with a brokerage, as they typically work with an array of different lenders. Different lenders often have different criteria for qualifying, and different minimum credit scores, so working with a broker that can find a lender for your credit range will help make the process easier. At Independent Home Finance Inc., you can give us a call at the above number if you would like to get started on the application process. We can also help you with a pre-approval or pre-qualification, if you are shopping for a home. As a broker, we have access to multiple different lenders and programs that work with bad credit.

How to pull cash out of a house?

If you have built up equity in your home, either due to paying off the balance or due to growing value, there are many different ways you can pull cash out of a house. The first option is called a cash out refinance. If you have an existing mortgage, a cash out refinance will create a brand new mortgage with a new loan amount. This new loan amount will pay off the previous mortgage, and will be set based on how much cash you wanted to pull out. With the new loan amount, the previous mortgage will be paid off in full, most closing costs will be paid, and the remainder will go to you directly. Once your cash out refinance closes, you will have a new mortgage company to make payments to, and your old account will close out as it is paid off.

Another option is a 2nd mortgage or a home equity line of credit. Both typically require higher credit scores than a cash out refinance, as there is more risk to the lender having a lien/mortgage in second position. Your first mortgage will remain intact, so a 2nd mortgage or a home equity line of credit (also known as a HELOC) will be an entirely separate loan that you will make payments on. This option can be very beneficial if you have good credit, and a very good interest rate on your 1st mortgage.

On investment properties, a hard money 2nd may also be possible, if your credit scores are not allowing you to do a traditional 2nd or HELOC. Hard money loans are very versatile for investment properties, and don’t always have to be a 1st mortgage/lien. Under “Private Home Equity Loan,” there is a section called Hard Money Loan that will provide more information on this type of loan program.

How to get a mortgage loan for a small business?

One type of loan program, called a hard money loan, is specifically for business purposes. If you already own a home and are looking to pull cash out for a small business, using a hard money loan may be an option. Hard money loans are usually temporary loans, so it is important to discuss with your loan officer what terms will be best for you. On the top of our page, under
“Private Home Equity Loan,” please visit “Hard Money Loans California Owner Occupied.” There are certain circumstances where it may be possible to do this type of loan in a different state than California, so please give us a call if you want to find out if you can qualify.