Shopping for a loan with a low credit score can be torture. No one wants to hear that mix of apology and judgment that comes with the sentence “I’m so sorry, but your application was denied.” To make matters worse, denied credit applications can temporarily lower your credit score even more.
For a more positive experience, it helps to know where to look. The following lenders are a great source of HELOCs and home equity loans for bad credit borrowers:
1. Mortgage Investors Group
Great customer service matters, especially when your credit profile isn’t a slam dunk. As a growing lender, Mortgage Investor Group (MIG) goes above and beyond for their customers. MIG offers online application, approval, online educational resources, and chat support.
Applications are reviewed on an individual basis, with non-traditional credit factors are considered. This allows MIG to approve borrowers for HELOCs and home equity loans that other banks would deny.
2. Vylla
Vylla is a niche home equity lender specializing in first-time buyers and buyers with lower credit. With low minimum credit scores, they can be a great source HELOCs and home equity loans for bad credit borrowers.
They offer free rate lock, online application, and online loan servicing. Note that preapproval is not available online, so approach with care.
3. New American Funding
If you’re tired of being treated like a number, New American Funding may be the way to go. They sidestep the biggest frustration of low-credit borrowers by offering manual underwriting.
Your application will be considered on all its merits by a person, not axed automatically by a computer because the score is too low. You can also enjoy online application, quotes, and loan servicing.
4. HomeBridge
The borrowing process can seem intimidating. HomeBridge offers a wealth of online educational resources to demystify the process.
This highlights their passion to lend to educated borrowers. It’s reasonable, considering their low credit score requirements. Pay attention to the origination fees.
5. Mr. Cooper
Servicing all 50 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands, Mr. Cooper lends to borrowers with lower credit scores.
They offer easy loan servicing via a mobile app. Please note that they do not offer online application — you must call or email for a personalized rate quote.
6. Citi
You might not have expected to see a giant bank on this list, but Citi doesn’t underwrite with a machete. They look at alternative credit sources like child support payments when considering decisions on HELOCs and home equity loans.
Take care, though — Citi is not transparent about its origination fees and does not offer a completely online application process.
7. Navy Federal Credit Union
Active or former service members probably already know about Navy Federal Credit Union (NFCU). They offer a range of loan products geared toward military families. Motivated to approve those who serve, NFCU looks at non-traditional credit sources.
They offer lower minimum loan balances, nationwide coverage, and an easy online application. Note that origination fees on a conventional loan can be upwards of 1%.
