It’s almost spring and it’s the perfect time to start shopping around for a loan even if you have bad credit. For most people their home is the best place to look for spare money – even if they have bad credit. During the spring most families look to do remodeling, yard work, or a variety of other things that require substantial money to complete. If you have bad credit, you really just need to look around a little bit longer. There are plenty of loan programs out there for people of all credit types and you’ll be pleasantly surprised how many lenders there are for people with less than perfect credit scores.

First you need to figure out how much equity you have in your house. Typically you can base your home’s equity on the sales price or an appraisal price if you have one completed. You’ll need to check the papers you received when you purchased your home for these prices. Now you need to check one of the the most recent loan statements. Simply subtract the current loan balance from the total value of your home and you’ll get approximately how much equity you have.

Next you need to create a budget so that you can figure out what you can afford. Get your total net income, calculate your total monthly expenses, and subtract the expenses from the net income. Most people keep the expenses in a checkbook, Quicken, or simply online in a bank statement. It’s best to use the average monthly expenses for a year instead of just one month since they change. You can get this by adding your total expenses for the past year and then divide that number by 12. Now you can figure out how much of your income is available outside of your regular expenses by subtracting the average monthly expenses from your monthly income.

Now you need to determine how much you can really afford to borrow from the bank. Most people find that the easiest way to do this is with a home equity amortization calculator. Another way is to use a physical book that has amortization values in it. See what the potential home equity loan amount is, interest rate, and the term you want in months. Mpst equity loan rates run between 6 and 17%, and are usually higher for people with bad credit (I’m assuming you already understood the rates would be higher). Most lenders will typically only finance up to 80% of your home’s equity, but some will go as high as 90%. Look at what the monthly payments would be for the loan you want and see if your budget would allow you to make the monthly payments. Whatever you do – don’t get an equity loan without having the monthly income to support it.

Do you feel like your money is locked in a vault and you can’t get inside it?  Well having all of your available money tied up in your home’s mortgage is just like that.  The challenge is when you have bad credit on top of that and need to get an equity loan with bad credit.

So is it impossible to get money out of the vault that is your house?  Not at all.  The best thing to do first is get your credit report so that you know just how bad your credit is.  Once you have your credit score you can take the next steps.  The next steps are to talk with your current lender to see whether they can help you.  If not, you’ll need to seek outside help and that can involve many lenders.  The easiest way to seek help from multiple lenders is to use a lending website that caters to helping people with bad credit get a mortgage or in this case an equity loan.

Let’s say you need to borrow money fast, but your credit isn’t good -  there are very few places that you can get help.  You can get a bad credit secured loan, but if you don’t own a home or have some residence with equity you only have a few choices: either an unsecured or a secured personal loan. Typically a low-interest unsecured personal loan can be hard to get, but there are resources that grant higher-interest loans -  both secured and unsecured.  Your credit history will obviously come into play here and bad credit is where the challenge is at.  Here are a few ways to get a secured loan when you have bad credit:

Title loan companies – you can easily get a fast guaranteed loan on your car by simply putting a lien on your car. The title loan company basically holds your car title while you continue to use the car. Of course this only works if you own the car free and clear of any loans since that’s the only way you’ll have the title. Now the amount they give you will depend on the age, condition and type of car, but the loan will typically be more than about half of the vehicle’s value. Typically these loans are payable within 30 days and the interest rate can be as high as 25%, which is crazy. So if you’re willing to pay what equates to an annual percentage rate (APR) of 300%, then go for it. If you don’t pay the loan back, they can possibly take your car.

Pawn shops – this is a long standing form of company that is used to making short-term and low amount loans. All that you need to do is bring in your personal property such as a guitar, stereo, or other items of value.  Then one of the pawn brokers will appraise it on the spot and loan you some money against it. They usually keep the loan term at 30 days and fees tend to be high, but you’re guaranteed to get money. If you choose to not pay it back accidentally or on purpose, the pawn shop is permitted to display it and sell it.

Typically the amount you can borrow for a bad credit home equity loan is calculated by deducting the amount you still owe on your existing mortgage from the current value of your property.

Most mainstream mortgage lenders don’t offer bad credit home equity loans due to the risks associated with them. Lenders that offer bad credit home equity loans typically offset the high risk by charging a higher interest rate than those rates offered others with a good credit rating.

Whoa – higher interest rates??  Don’t let this scare you – the higher interest rate applied to a bad credit home equity loan still makes this a better way of getting cash than other methods.

The best way to look at it is – even if the interest rate for a bad credit home equity loan is 9 to 18 percent, it’s still better than paying ridiculous rates of 19-35% for credit cards. The other benefit is that accrued interest on a bad credit home equity loan is typically be tax deductible unlike credit card interest that’s not.

It seems that everyone is looking for money these days and not just people with bad credit.  If you do happen to have bad credit, you’ll need to do a little extra work, but the money is available.

Right now Obama has many plans in effect to help consumers with obtaining money based on their home’s value.  Regardless of your credit situation, the best way to find out what programs are available is by picking up the phone and calling your current mortgage company.  Just explain your situation and what you’re looking for and if there’s a plan that they support, then they’ll ask you a few questions and send you some paperwork to fill out – that’s it!

If you have any accounts in collection, mortgage lenders typically require them to be paid off before considering your application. Consumer credit counseling is usually not permitted within 2 to 5 years, and a prior bankruptcy is usually not allowed within the last 2 to 7 years. Your mortgage payments must be current and you can’t have late mortgage payments over 30 days within the last 12 months.

When you qualify for a home equity loan or second mortgage, most lenders use the middle of 3 credit scores from whoever makes the most money on the loan application. Sometimes you can exclude a spouse from an application to avoid a problem, but that’s a real challenge.

WASHINGTON – The government has introduced a pair of new programs that will provide $800 billion to help unfreeze the market for consumer debt which Treasury Secretary Henry Paulson calls vital to supporting the economy.

Paulson says key markets for consumer debt such as credit cards, auto loans and student loans essentially came to a halt in October. He says the new programs are aimed to get lending back to more normal levels.

Paulson says all the government programs have been aimed at supporting the lending that is vital to the economy.

http://news.yahoo.com/s/ap/credit_crunch;_ylt=AtdMkLblrh1f..wfI1kbPjHXn414

There’s always change in the mortgage and lending industry after an election and this year won’t be any different. His changes will most likely make it easier to obtain an equity loan even in today’s current state. Pay attention to the news and the moment you hear anything about mortgage relief or credit assistance – start applying for a loan.