Lesa asked in Business & FinanceCredit · 1 decade ago

How to get a loan to fix up a house that is paid off with bad credit?

I may need to fix up a house, in the near future, that has been paid off. My credit is not great, so I was wondering how this could happen.

Thanks!

2 Answers

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  • 1 decade ago
    Best Answer

    If you have a house that is paid for - you don't need excellent credit - your home is the asset the bank likes. Get a Home Equity Loan - ask for 25,000 - you won't get any cash but you will get a checking account that allows you spend money on your house - you use the checks to get a roof or upgrades or repairs to the house. You may not use it for a new car, or vacation as the bank scrutinizes these payments. You must pay something every month on this loan, at least the minimum payment. The Bank will tell you the Minimum payment and the interest rate is higher than a regular home loan, because you only have five or so years to use and pay off the loan.

  • Anonymous
    1 decade ago

    Your less than great credit will probably cause you to pay a higher interest rate than others (because of the risk the lender is taking) but you should still be able to gett a loan fairly easily if you don't borrow too much. The home will be used as collateral for the loan, and the lender is going to want to make sure they can get the loan paid off if you default and they have to foreclose and sell it.

    So, if you are looking at only borrowing 25%-30% of what the home is worth, you can probably get it.

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