125% security of home equity loans even with bad credit

Home equity loans, home loansEver thought how you can manage a loan putting a value more than your home equity? 125% loans are actually second mortgages that increase the value of a property with its previous mortgage. It need not be an exact 25% enhancement in the equity value, 125 is just a term used to define this particular kind of loan. Lenders are turned off with bad credit records risking to faulty payments. But 125 equity loans are a better deal when considered bad credit. Property has the best security among all alternatives and this is what drives the lenders to provide a loan in hope of getting better profits. A substantial increase in the security value is the logic behind approval of such loans and it is easy to get even with bad credit. Usually 125 loans charge a higher interest rate involving both principal and interest and this is a good thing for the lenders.

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