Home Equity Loans after Bankruptcy - Choosing a Low Rate Lender

After a recent bankruptcy, your loan options are limited. Those needing
quick cash for home improvements, wedding expenses, or college tuition
may be unable to secure the necessary funds. However, if you own a
home, getting approved for a home equity loan following a bankruptcy is a
realistic option.

Understandably, banks and credit unions are reluctant to approve an
unsecured loan or credit card application. Because home equity loans are
secured by your property, lenders are more equipped to take a gamble.
However, if the loan cannot be repaid, you will lose your home.

Benefits of a Home Equity Loan

Homeowners obtain home equity loans for various reasons. In fact, some
apply for these loans in an attempt to avoid bankruptcy. Home equity
loans are perfect for debt consolidation and paying past due utility
bills. The interest rates are typically lower than credit cards and most
consumer loans. Thus, homebuyers are able to payoff debts, improve
credit, and save money at the same time.

Some prefer home equity loans because they do not involve closing
costs. Refinancing an existing mortgage is great for obtaining a lower rate
and receiving cash. However, because a new mortgage is created,
homeowners are required to pay closing fees, which could amount to thousands
of dollars.

Home Equity Loan Lenders

Getting a low rate on a home equity loan following a bankruptcy will
require work. Homeowners must be prepared to research various lenders and
negotiate a good finance package. To begin, submit a loan application
through your existing mortgage lender. If your payment history is
acceptable, the lender may consider this when approving your application.
Thus, you may avoid paying a higher rate.

If your lender offers you a seemingly unbeatable rate, do not stop
here. Continue to obtain quotes from other money sources. Shopping around
for home equity loans online is popular. Mortgage websites make it very
convenient to get approved for a loan without leaving your home. Simply
submit your loan application and wait for a reply. Within a few hours,
lenders will contact your with their best offer.

After obtaining at least four offers from home equity loan lender,
compare each offer. What are the terms? Interest rate? Monthly payments?
Subsequently, pick the lender that offers the most desirable mortgage
package.