Equity Loan Bad Credit

Do you need good credit to take out a home equity loan? Bad credit affect the chances of being considered?

My credit is poor, but I have probably $ 80K in equity in my house. A bank refused to approve a home equity loan because of bad credit?

If you have bad credit, is less likely to be approved for a loan, or if you are approved, you may have to pay a higher interest rate. Part of the decision is based on what% of the $ 80K in equity is the value of your home. If your home is worth $ 800k and you have $ 80K (10%) in equity and credit bad, is unlikely to be approved for a home equity loan. On the other hand, if your house is worth 160k and has $ 80k (50%) in equity and bad credit, there's a good chance it is approved for a loan. This is because look at how the bank could do from home if they had to close, and if only 10% capital, almost all of which may be eaten by the costs of foreclosure, so the bank loses money if you paid the $ 80K and then had to close.