How to Tap Into Your Home Equity

How to Tap Into Your Home Equity (Even with Bad Credit)

Yes, your home can still work for you, even if your credit doesn’t.

By Tommy Barnes ◦ May 14, 2025

1. Know Your Credit Score, Then Work Around It

Key Point: Start by checking your credit report for free and fixing any errors. Knowing your score will help guide your options.

Bad credit doesn’t mean no options. Begin by pulling your credit reports at AnnualCreditReport.com. Comb through them for mistakes that could be dragging your score down. Even a 20-point bump can make a difference. Once you understand your score, you can start choosing the right strategy to access your home’s value.

2. Use a Co-Signer to Qualify for a Home Equity Loan or HELOC

Key Point: A creditworthy co-signer can help you qualify for traditional home equity financing.

Home equity loans and HELOCs are common, but typically require a credit score of 620 or higher. If you’re under that threshold, consider applying with a co-signer who has strong credit. You’ll still need to prove you can handle the monthly payments, but a co-signer may get you in the door.

3. If You’re 62+, Reverse Mortgages Can Unlock Equity with No Payments

Key Point: A reverse mortgage allows you to access equity with no monthly payments, credit score is less important.

For homeowners aged 62 or older, a reverse mortgage can turn your home’s equity into cash with no monthly payments. The loan is paid back only when you sell or pass away. These loans are more accessible for borrowers with low credit but come with fees and strict rules, so read the fine print before diving in.

4. Try FHA or VA Cash-Out Refinance Programs

Key Point: Government-backed programs like FHA and VA loans allow refinancing with lower credit requirements.

These refinancing options let you swap your current mortgage for a larger one giving you the difference in cash. FHA cash-out refinances often accept scores as low as 580, while VA cash-out options are even more flexible for qualified veterans. This is real money in your hands, but be cautious of closing costs and new interest terms.

5. Consider a Home Equity Agreement (HEA) for True Flexibility

Key Point: HEAs like Unlock let you access equity without debt, monthly payments, or high credit scores.

Want the cash without the burden of a traditional loan? A Home Equity Agreement (HEA) might be your best path forward. Unlock’s HEA lets you receive a lump sum in exchange for a share of your home’s future value: no monthly payments, and no traditional loan involved.
Here’s why it’s powerful:

• Get paid now: You receive a lump sum based on your home’s value

• Low credit score? No problem: Minimum credit score of 500 accepted

• No payments until you sell or refinance

• Total freedom: Use the funds for anything – debt, repairs, emergencies, or investments

This is a partnership. You get financial breathing room now, and pay later only when your situation improves.

Don’t Let Bad Credit Trap Your Wealth

Just because your credit score took a hit doesn’t mean your financial future has to. Your home equity is still real, and with the right strategy, you can tap into it.

✅ Explore traditional options with a co-signer

✅ Use government-backed loans if you qualify

✅ Or skip the bank entirely with a flexible HEA from Unlock →

Terms and conditions apply. Some applicants will not qualify. Not available in all states.

Unlock Agreements are provided exclusively by Unlock Partnership Solutions Inc., Unlock Partnership Solutions AO1 Inc., Unlock Partnership Solutions AO2 Inc., and Unlock Homeownership Solutions Inc., all of which are wholly-owned subsidiaries of Unlock Technologies, Inc. (collectively, “Unlock”).

Unlock holds the following Real Estate Broker licenses: Arizona – CO698434000; California – 02141737; Colorado – IC100092644; D.C. – REO40000074; Florida – CQ1062618; Hawaii – RB-23715; Illinois – 478027520; Massachusetts – 423954; Michigan – 6505431174; Minnesota – 40797638; Nevada – B.1002613; New Jersey – 2185646; North Carolina – C33769; Oregon – 201243836; Pennsylvania – RB069442; South Carolina – 25463; Tennessee – 265329; Utah – 12139955-CN00; Virginia – 0226033193; and Washington – 21010143.

The applicable Unlock entity enters into the Unlock Agreement directly with consumers and does not act as an agent or broker on behalf of any third-party. No agency relationship shall be formed between any Unlock entity and a consumer pursuant to or in connection with an Unlock Agreement. All Rights Reserved. Other terms and restrictions apply.

Each home equity agreement (HEA) is subject to additional individual underwriting review.
All transactions are subject to verification of your credit (with a soft credit pull), identity, property value, home insurance, title, and outstanding property liens. Other verifications may be required.
Unlock may also require HEA proceeds to be used to clear any pre-existing liens as a condition to close.
The following limitations shall apply in all cases: no bankruptcy, foreclosure action, short sale, or deed in lieu within the previous five years; no 90-day delinquencies on any mortgage within the prior 24 months.
In most cases, Unlock must be in no greater than 2nd lien position and the property must be clear of any liens deemed unacceptable by Unlock in its discretion.
A minimum HEA amount of $15,000 is required on all transactions.
Property condition rating, as described in the Uniform Appraisal Dataset (UAD), must be at least C4 or better and properties for which comparable valuations, in the discretion of Unlock, do not exist may be ineligible.
Not available in all states.
To secure the performance of your obligations under HEA, Unlock will place a lien on your property in the form of either a “performance deed of trust” or a “performance mortgage” depending upon which state the property is located. The lien is terminated when you settle your HEA.
Unlock charges up to a 4.9% origination fee and other third party paid closing costs such as appraisal, title, and government fees.
The home equity agreement term is 10 years.
The timeline to funding of approved HEAs may vary depending on when the homeowner submits a completed application and all supplemental documents are received and verified.
An affiliate of Unlock Technologies, Inc., Unlock Home Equity Solutions Inc. d/b/a Unlock and/or Unlock Technologies (“UHES”) has applied for certain licenses which may be pending. UHES does not presently offer home equity agreements in any state where such products must be offered as a licensed mortgage product or any other type of licensed financial product.
Please contact us for more information at hello@unlock.com.
For additional information please review the Unlock Product Guide.