What type of home second mortgage do you need?

People get home second mortgages for a nice amount of reasons. In most cases they want to consolidate their debts. When you consolidate your credit cards you can get an interest rate which is much lower than the previous. A lower interest rate will save you more money in finance charges over the life time of the new loan.

Most of the time you consolidate your debts you are combining all of your bills into one bill which gives you the convenience of having to make only one monthly payment opposed multiple to multiple agencies. You stop the stress and also forget all the different due dates and not to mention mail and stamps. Unless you pay online then you can have fewer bookmarks!

The time you get your home second mortgage you are now using the equity in your home as collateral or security for the loan. If you fail to pay back the bank or lending institution it may result in foreclosure on your home. A few cities if your home is foreclosed upon and sold at an local city auction you may be responsible for any shortage of balance remaining after the sale. And of course this will add to the stress factor and getting a home second mortgage is not stressful might I add

It’s completely fine to think ahead and take out a home second mortgage upon buying you home. A second mortgage will help more than harm and you avoid paying private mortgage insurance, (PMI), which is insurance you have to pay if you don't put the 20 percent down at the time of purchase.

Its different types of ways to use a home second mortgage which leads to different types. The first is a home equity line of credit also known as HELOC. Its assigns a credit limit which you can access whenever you need or want. Its ok to access the cash by using the checks that are issued when the loan is approved. HELOCs can also have terms from 4 years to 24 years and leaving the interest rate always changeable. If the interest rate goes up the payments will follow. A HELOC is also able to be reused, meaning once you pay it off you can access and reuse the account again.

A different type of home second mortgage is the home equity line of credit which is is the sister to the HELOC. With a home equity loan the term limit can sky rocket up to 15 years and the interest rate is of course fixed. At that point its no need to worry about payments increasing and you know exactly when this type of loan is supposed to be paid off. After you finally pay off a home equity loan its no more accessing that account. That’s why its called a closed end loan, the interest on a HELOC and home equity loan can be tax deductible.

These are just a few types of ways to use a home second mortgage, check back soon and we’ll cover some more!

Home Second Mortgage

Welcome to Second Mortgage NOW. This site provides tips and techniques and hold your hand into getting your home second mortgage. To start, do you actually need a home second mortgage?

Well home second mortgages enables you to make extra money, if you are positive that the property can be sold at full price or close, if foreclosed.

Example: If you have found a house worth $300,000 and found that it has a first lien with total balance of $190,000 and a second mortgage of $50,000 you could approach the second lien holder and buy the second mortgage for $8,000. Well its is no guarantee the house will be sold for enough cash to justify the home second mortgage after satisfying the first, the second lien holder may be happy to take the money.

Now, if you foreclose, and at the foreclosure auction the highest bid is $270,000.

You will have to pay the first lien that is $190,000 in addition to $12,000 in late payments and interest.

You now paid $202,000 to the first mortgage lender, $8,000 to the second and you have to pay property taxes of about $6,000.

In other words you got a house for $216,000 and sold it for $270,000. Now you extremely happy since the home second mortgage got you a profit of $54,000.

Now take a week vacation!

Check back and ill walk you through step - by - step! Feel free to post questions!