Having good credit is one of the most important things for any American. In fact, some people think that those with good credit scores can get whatever they want. Anyone who has ever borrowed money or signed up for a credit card will have a credit file at one or more of the three major credit bureaus, such as Equifax, TransUnion, and/or Experian. The information in those files, including whether they pay bills on time and how much money they owe, is used to compute their credit score, a number that is used as a guide to their creditworthiness.
There are many reasons why you may have a bad credit score: maybe you are paying the bare minimum on your credit card every month, or you are failing to stick to your credit agreement or even falling victim to identity theft. But whatever the reason is, if you are a homeowner and want to tap your home equity, you can still do it, even with a bad credit score. Do you want to know how? Keep on reading to learn how to do it.
The first option is selling your house. Pretty obvious answer, you might be thinking. But it is not. As long as you have the time to get it sold, and moving out is not such a big deal for you, this will be a good idea if you need to access the equity in your home. However, if you don’t have the time and don’t want to move out of your property, this may not be the best choice.
Option number two is a relatively new alternative that will allow you to sell your home and rent it back from the investor who buys it. This option is called a Sale-Leaseback. Sell2Rent offers a Leaseback solution that does not depend on your credit score but on the amount of equity you have. This means you may be able to sell your house to an Investor interested in keeping you in your home. The Investor purchases your property the traditional way, pays off the mortgage loan at closing and you keep any proceeds that remain after your standard closing costs are deducted. The lease terms are agreed upon upfront and in some cases, you can prepay your first year’s rent using the closing funds.
Now you know that even if you don’t have good or excellent credit, you still have options to tap into the equity that you’ve built in your home.