About Home Equity Loans for People With Bad Credit

Video Transcript

"Hi this is Matt McKillen with Innovative Financial Group. The question posed to me today is are there home equity loan programs available for people with bad credit? If you asked me that question 3 years ago, I would say yes there are programs available. Generally the way it worked is that if you had a lower credit score, you could still get a home equity line of credit for example or a second mortgage but of course the interest rate would be higher. The lower the score, the higher the risk and of course they bump the rate for that for taking that risk. In today's lending arena, in 2009, lending guidelines have tightened up nationwide really in the last 12 to 18 months things have really tightened up due to the declining economy, declining values on homes. So I would have to say at this point, probably a home equity loan for someone with troubled credit would be almost impossible to get. FHA will allow a cash out refinance on a first mortgage up to 90% LTV with borrowers with less then perfect credit bureau scores, that's probably your best option is to looking for first mortgage refinance with FHA that would allow for cash out. Again my name is Matt McKillen, I'm with Innovative Financial Group."