A bad credit equity mortgage is easier to get than a first mortgage for buying a home, since you are using existing equity to borrow money. The lender’s risk is significantly less, since if you don’t pay, they can take your house.

However, despite the increased risk to you, there are some advantages. An equity mortgage can be used as a bill consolidator, and you can essentially “trade” all of your high-interest loans, such as credit card payments and car payments, for a single payment, which is often significantly lower than the collective amount of debts you will be paying off with the equity loan.

It can also be used to take care of home improvements, or large unexpected debts. From a short-term perspective, this can solve a lot of problems, since it allows you to breathe a little easier and have a little extra money to live on day-to-day. You will also get the advantage of your interest payments being tax deductible, so long as your combined mortgage does not exceed the value of your home. It may even be the only way to avoid bankruptcy. On the downside, your equity loan is often for a longer period of time than the high-interest loans.

The easiest type of equity mortgage to get is the 100 percent equity mortgage, which allows you to borrow against available equity, up to 100 percent of the value of your home. For example, if you have a home worth $100,000, and have an existing mortgage for $20,000, you can easily quality to borrow $80,000, sometimes even with minimal qualifying paperwork.

Other types of equity mortgage instruments may allow you to borrow greater than the value of your home, although the credit requirements for such a loan would be stricter than one that borrows only against available equity.