“Bad credit” refers to poor credit ratings. Bad credit ratings are usually caused by deferred or skipped payments. It can also be affected by exceeding ones card limits or if bankruptcy is declared. There are different agencies that keep a record of credit ratings. Guaranteed bad credit home loan is addressing the risks of loaning to such applicants and providing a guarantee for the bank to recover their money.

A person with a bad credit can also get a home loan. He can take a loan against the money that he has already invested in his home. The increase in the real estate price of that particular loan can also be liquidated. This money can be used to pay older debts or can be used for other personal funding needs such as education.

Guaranteed bad credit home equity loans can be obtained by logging on to relevant sites on the net or through different agencies. These sites provide a guarantee for loans after certain conditions are met. This usually involves assessing the present status of any credit balances and appraising the home or property’s value. After the appraiser finishes this process, the loan’s interest rates are worked out.

Qualifying for a home loan is not difficult even if one has bad credit. The first step is the appraisal. Home lending authorities send a team or a person to do the appraisal. During this process, the actual cost of the property is assessed and it is decided whether the property is worth enough to cover the loan.

One can opt for a fixed or a variable interest loan. However, the interest rates vary in different situations. In fixed loans, a specific amount of interest and principal is payable every month. In this case the amount payable is constant over the entire duration of the loan.

Another option available is an adjustable interest loan. This begins with an attractively low interest rate and the monthly payment is lower than it would be with a fixed rate loan. Then, at specified times, the interest rate will shift up or down depending on market conditions at that time. However, prearranged interest rate caps keep the rate from changing too often or by too much.

Due diligence is essential and a check should be conducted on the “promises” made by different agencies. There are some cases when a heavy penalty is charged for late payments, for example, and some web sites guaranteeing home loans often have some hidden costs.