If you want to quickly improve your finances and get your hands on cash for a particular purpose, getting a home second mortgage can be just the right thing for you. Even people with bad credit can put their hopes on a second mortgage as it is not only easy to obtain, but is also available on lower interest rates than an unsecured loan or a cash advance on a credit card.
Instead of refinancing your first mortgage to get a higher sum, you can borrow out a smaller second mortgage. So a second mortgage is actually another mortgage on your home, leaving you with two mortgages. There can be many reasons for getting a second mortgage, but there are some that stand a better chance in the loan application. They’re- Home remodeling, Home improvements, education, medical emergency, reliable investments, care for dependants and transportation.
The advantage of getting a second mortgage is that the interest rate and the repayment schedule may be more favorable than that on refinancing your existing first mortgage. If you are behind on bills, a second mortgage with lower monthly payments can be a great option. Even if you have bad credit, there are adverse credit mortgage lenders who will offer a second mortgage on your home. The lender would look for good equity in your home before loaning you the money. If you have reasonable amount of equity in your home, search for a home equity loan option, as these lenders may be eager to set you up with a new mortgage.
On the other hand, a second mortgage puts a second charge on your home. So even if you pay the first mortgage and fail to pay for the smaller second mortgage, the lender can seize your home. Keeping all these pros and cons in mind, one can prudently decide on getting a home second mortgage among other options, to keep the monthly obligations at the bare minimal.