Home Equity Loans And Your Credit Score

[Oct 16, 2009.]

 

Update On No Credit Check Loans

Is it time to let go of the past and move forward?  If no credit check loans do come back, it probably won't be for a very long time. Instead of waiting around, think about how you can improve and maintain a great credit rating.  Make sure you are making your required payments on time every month. Try to follow the 30% rule by not carrying a large balance on your credit cards. If your credit limit is $1000, don't carry a balance of more than $300 from month to month.  Learn more about your FICO score so you will be eligible for cheap loans.

How Your Credit Score Effects Your Home Equity Loans

If you are looking for cheap loans, home equity loans are still a good way to go. But in order to get the cheap loans your credit score should be 620 or better.  Normally the interest rate or margin (on an adjustable rate) is determined by the loan to value ratio and your credit score. The higher your credit score and the lower the loan to value, the better your rate will be.  Banks consider a low credit score and a high loan to value very risky.  The more risk the bank takes, the higher you can expect the interest rate or margin to be on your home equity loans.

Should You Refinance Your Home Equity Loan?

There are at least two good reasons to look into refinancing your home equity loans: the loan to value ratio and your credit score. If you took out your home equity loan a while ago, it is possible that the value of your house has increased. If the value has increased, refinancing your home equity loan might save you money.  A lower loan to value ratio is less risk and more attractive to a lender. 

If your credit score is better today than when you originally took out your home equity loan, it might make sense to refinance. Maybe you used your loan to consolidate debt.  Once the debt was consolidated, it may have raised your score making you eligible for a better interest rate.  There is no guarantee a cheaper home equity loan is out there. But, it doesn't hurt to check out the free information available.

Be Proactive About Your Debt And Loans

Saving money is like having a second job. It takes effort to keep on top of things, especially these days when things are changing so fast. If makes sense to protect your income and make it go as far as possible. Saving money can be compared to getting a raise at work. Making sure you don't pay too much interest on your debt and other loans is essential.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.