People who are not able to earn that much working or have bad credit will have a hard time getting a loan from a creditor. The only way to borrow will be through home equity that uses the house as collateral. Lenders perceive home equity loans as relatively safe. This is because the bank can simply confiscate the house of those who fail to pay. Studies have shown many avail of this to consolidate high interest debts, finance the purchase of a second home, pay for the tuition in college and renovate or remodel the house. Despite the risk of losing the house for those who are unable to pay, many still avail of this because it is for anyone to qualify for and get a huge amount. The interest rates are very affordable and this can be written off as a tax deductible. One program that is gaining popularity is the 125% equity home loan. This is considered to be a second mortgage that allows the individual to borrow one fourth of the value of the home. If the house is worth $100,000, this allows the person to borrow up to $25,000. Many of these firms can be found online. The individual may only qualify after achieving a certain credit score and under certain guidelines, which is up to the lender. The basis for those who qualify for this loan will be up to the lender. These firms can look at the length of time the homeowner has lived there as well the individual’s current credit score. These things will influence the amount that will be given when the application has been approved. The lender will not require the applicant to have the property appraised when requesting for a home equity loan. The purchase price will be used as the indicator if the person has lived there for less than a year. An automated value model, recent tax assessment or simple drive by appraisal will be utilized if the applicant has lived there for a number of years. A home equity loan may last from 10 to 30 years. It is best to shop around and compare the rates of various lenders before signing anything on paper. Everyone in the household must understand what will happen in getting this type of loan. This means making some sacrifices to cut down on costs to be able to pay on time rather than losing the house.