Can You Get a Home Equity Loan After Bankruptcy?
Looking to get a home equity loan but have a bankruptcy on your credit history? It may not be as bad as you think! Actually, it may be just the thing to help your credit recover. Find out the basics of a home equity loan and see how some of our clients are using it to help them bounce back after filing bankruptcy.
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Home Equity Loans and Bankruptcy
Bankruptcy will appear on your credit history for about ten years. However, there are circumstances where you'll be able to get a home equity loan much sooner than that. Each case is unique, so we encourage you to contact our office to review your needs.
Two issues that often lead to defaulting on financial obligations and make it difficult to recover:
- high-interest rate loans
- having multiple loans
That's why many of our clients are looking for ways to consolidate into one, low-interest rate loan, and that's what a home equity line of credit can do for you!
If you have a bankruptcy on your credit history or are on the verge of filing, you might want to consider a home equity loan as a way to pay off multiple debts and have just one easy loan to focus on.
What is a home equity loan?
A home equity loan taps into the equity, or accumulated value, of your property. The equity is determined by an appraisal, similar to the one you had when you first purchased your home. Once approved for your equity loan, sometimes called a second mortgage, you'll be able to use your funds to pay off any outstanding debt.
Benefits of a Home Equity Loan
Interest rates on home equity loans are generally lower than other loans or credit cards. In fact, most of our borrowers use a home equity loan to pay for other items such as college tuition or medical expenses rather than applying for credit cards or getting a personal loan.
Home equity loans have flexible terms, offering you the choice between a fixed or adjustable rate. Another benefit is that the interest paid on a home equity loan is tax-deductible! The benefits of a second mortgage after you've filed for bankruptcy are also excellent.
Your single monthly payment will often be lower than your current multiple debts, making it easier to stay up-to-date with your obligations. And, after a few months of on-time payments, your credit score will begin to rise, helping your credit to recover!
Getting a home equity loan after bankruptcy can be a challenge, however, don't let that discourage you! We have the experience and dedication to get loans approved in all sorts of financial situation.