“No Credit Check Required” – The Truth About Home Equity Loans With No Credit Check
A home equity loan is a mortgage loan that uses your home as collateral. The amount you can apply for will directly correlate to the amount of equity in your home. A home equity loan will have zero impact on your principal (first) mortgage. The payments are made completely separately from each other. A home equity loan is a “stand-alone” mortgage and a separate agreement that you make.
At Turnedaway.ca, we get a lot of inquiries about home equity loans with no credit check. People with poor or damaged credit worry about their credit scores. The ironic thing about a no-credit-check home equity loan is that many lenders don’t care about bad credit. Home equity loans are approved on equity, not income or credit. The truth about a “no credit check required” loan is that you may be missing something if you assume you need one!
Who are the mortgage lenders that will offer no credit check home equity loans?
In the mortgage lending world, there are very few mortgage lenders who offer home equity loans without a credit check. Your bank will most certainly insist on one. Private mortgage lenders offer no credit check home equity loans. However, there is one problem with applying for a mortgage with no credit check. If you don’t know your score, you may be missing an opportunity to get a better mortgage. A mortgage broker can explore this for you by accessing your credit bureau report.
If you don’t have a mortgage broker look at your credit rating, you forfeit the option of shopping around for a more favorable interest rate. You may end up with a mortgage that has a higher interest rate or ultimately doesn’t suit your needs. Just because you have bad credit – it does not mean that a private lender is your only option. You may pay a premium for skipping the shopping process.
An experienced mortgage broker may be able to place your bad credit home equity loan with an alternative lender. Lenders like trust companies or credit unions. Anyone considering applying for a home equity loan without a credit check should be cautious. Home loans with no credit check rarely serve a homeowner’s best interests. Instead of a loan with no credit check, apply for a bad credit home equity loan. Be open to having a professional review your financial situation and your credit rating.
If credit is not part of the home equity loan approval process why do most lenders insist on checking it?
Since most lenders don’t base home equity loan approvals on credit, wouldn’t it make sense to base decisions on equity? True, home equity is at the core of the lending decision but a credit check can determine more than just your credit score. A credit check can reveal a lot about you as a borrower.
For example, a credit check allows a lender to determine if you’re attempting to commit mortgage fraud. A credit report will also tell a lender if you have any liens or writs against you. Typically outstanding charges need to be paid from the home equity loan proceeds. Lenders prefer to check credit because it saves time and ensures they are not being defrauded. A check also serves a borrower’s best interests because it ensures they are getting the best mortgage they can qualify for.
Bad or damaged credit is not uncommon, credit checks do reveal the truth, but they also may not be as bad as you think. One of the biggest mistakes a borrower can make is assuming that he/she will have to pay more. Never assume the worst, always hunt for the best solution instead. Experts say that we don’t make our best financial decisions when we worry or obsess over our credit scores. A mortgage broker can help you understand your score and who to target as a lender. Truly, it bears repeating – your score may not be as bad as you think.
I have bad credit and I don’t want to make it worse with a credit check.
You’ve probably also heard that every time your credit report is checked it can further damage your credit score. We don’t recommend applying with multiple lenders on your own. If you do, you will see a change in your score. Declined applications and multiple inquiries will have a negative impact. A mortgage broker only has to check your score once. We can use the same results to approach multiple lenders if we have to. We can help to preserve your score and we can also build it up if you need our help.
Home equity loans with no credit check sound appealing but they don’t really serve a purpose. While a credit check can lower your credit score, the benefit of knowing your score outweighs any negative consequences. The benefit increases when you don’t require multiple checks.
By having a professional mortgage broker review your credit, we can help you repair any bad credit you may have. We will also point out any discrepancies in your credit report which are lowering your score. Any experienced mortgage broker can also warn you about potential fraudulent activity.
I’ve been bankrupt or have filed a consumer proposal
If you’ve been bankrupt or have filed a consumer proposal you’ve likely heard that your credit rating is bad. If you’ve recently been bankrupt, your rating will be somewhere near the wrong end of the scale. It’s true, that is the worst possible scenario. If you’ve filed a consumer proposal you’ll see a slightly improved score, depending on a few other factors. Your score doesn’t just include your past and past due accounts! It also accounts for anything ongoing, secured, or revolving in your budget.
For example, a car loan or mortgage. If you’ve filed a bankruptcy or a consumer proposal, don’t assume you need to find lenders who offer home equity loans with no credit check. Visit a broker instead and have your score reviewed. We get mortgages approved, if you’ve got home equity we should be able to work with your damaged credit.
Why Choose Turnedaway.ca?
A mortgage broker who specializes in bad credit home equity loans will also ensure you’re not missing a better deal. Mortgage brokers have no allegiance to one single lender. Brokers will shop your application around to make sure you get the best deal possible. Home equity loans with no credit check may seem like a good idea but you may do more harm than good.
We specialize in hard-to-place mortgages and how to find the right fit between borrower and lender. Checking your credit might be a mandatory part of our application process, but isn’t it nice to know that you’ll be working with someone who actually cares?
At Turnedaway.ca, we want to help you fix your credit. We want to ensure that you are getting the best deal possible and we’re committed to helping you achieve your goals. If you’re in the market for a home equity loan but are concerned that you may be declined because of your credit score, stop worrying. Let us work on your approval and walk you through the process of repairing your credit rating.