second mortgage advice
How do I know what is the best Second Mortgage
Home Loan for me?
The information in your credit history helps mortgage lenders decide how
much credit and what interest rate you are eligible for, and then match it
to a bad credit home loan. The better your credit history, the more likely
you are to qualify for the best credit deals. The first step is to
understand if you are considered a credit risk. Most lenders will consider
you a higher credit risk only if your credit report states that you have
more late and slow payments than what is shown below:
Revolving credit (i.e. credit cards): No payments 60 days or more past
due and no more than two payments 30 days past due.
Installment credit (i.e. car loans): No payments 60 days or more past due
and no more than one payment 30 days past due.
Housing debt (i.e. mortgages and rent): No payments past due. This can be
proven by providing (borrower's) canceled checks for the past 12 months or a
loan payment history from the mortgage service.
OK, so you have bad credit, but how bad is it? The very first step to
obtaining a bad credit home loan is to obtain a credit report, along with
your credit scores. There are 3 main credit reporting agencies used by the
mortgage Industry and they too will usually pull a credit report. Then the
credit score contained within the credit report is used to determine your
credit worthiness. And all this will determine which of the bad credit home
loan products would suit you.
First you need to determine how long you need the second mortgage home
loan for. Some second mortgage home loans may extend for as long as 15 or 20
years; others may require repayment in one year.
Be sure you understand how much your second mortgage home loan monthly
payments will be and what they cover. Your mortgage company should be able
to give you this information in advance. With some second mortgage home
loans, you’ll be required to make monthly payments on the principal and
interest. With other loans, you may be required to pay interest only on the
Many companies will charge a fee for lending you money. The fee is
usually a percentage of the second mortgage home loan and is sometimes
referred to as "points." The number of points mortgage companies charge
varies, so it may be worthwhile to shop around. If the fee seems too high,
you may be able to bargain for or find a lower fee. Be sure to get the
amount of the fee in writing before you take the second mortgage home loan.
If you have a fixed rate loan, the interest rate is set for the life of
the loan. However, many companies offer variable rate mortgages, also known
as adjustable rate mortgages or ARMs. These provide for periodic
I have had over a dozen loans in the past three years including bad
credit mortgages due to a bad credit history. This information comes from my
experiences, good and bad but are proven strategies to get out of debt and
make some real gains.
Check it all out at...