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Yes you can get a second mortgage with bad credit

Posted by  on Feb 08, 2010
 
Many homeowners fall on hard times at one point or another in their lifetime career, or even prior to owning a house. Credit scores are affected by hard times and the inability to pay bills on time. Instances like this may occur due to medical bills or because of smaller bills that have become difficult to pay on time, or even pay at all.

A good way to recover is to consider a bad credit second mortgage loan. Home ownership and home equity are required in order to qualify for a bad credit second mortgage. so it is not entirely bad credit. Most people in this situation have had a miscalculation, or oversaw a fluke in their banking. If money hasn’t been borrowed against the home for several years, there is typically enough equity on the home to qualify for a bad credit second mortgage loan. While the process for getting a bad credit second mortgage loan may be difficult, the payoffs can be extremely advantageous. Not to mention, get help the “bad credit” that looms.

There are many advantages in applying for a bad credit second mortgage loan. A bad credit second mortgage loan can offer lower interest rates on high interest bills.

If credit card bills are something that is contended with every month, a bad credit second mortgage loan can offer a lower interest rate. Monthly payments on a bad credit second mortgage are generally lower than what you'll pay on high interest bills. A second mortgage is typically borrowing money that is accrued on equity, so a bad credit second mortgage allows that money to be borrowed, even with bad credit. The payments are much easier to make, and make less to worry about.

Financing a bad credit second mortgage loan offers a "break" from payments. It is generally true that when you finance a bad credit second mortgage loan, you have a 30-day period of no payments on the loan. This can be of tremendous assistance, especially if the loan is used to pay off other bills.

The interest may be tax deductible. Ask a mortgage company and tax preparation consultant to verify, but the interest on a bad credit second mortgage loan may be deductible on federal income taxes.

Because the mortgage company sees the bad credit second mortgage as a high risk, interest rates tend to be higher on bad credit second mortgage loans than on loans for those with good credit ratings. This does not mean that the interest rates are too high to handle, but the borrower may not get the best mortgage interest rates available. If the loan is used to pay off bills, consider the all facts. For example, the interest on the bad credit second mortgage loan is lower than high interest credit cards, which allows the borrower to pay off the amount owed much faster.

Obtaining a bad credit second mortgage loan can be a time consuming and exhausting task. Financial institutions are leery of working with individuals and businesses with bad credit, thus, obtaining a bad credit second mortgage can be very difficult.

Most importantly, be patient. Lenders need time to consider high-risk loans. Plan on two to three months or longer to obtain a bad credit second mortgage loan. Keep the advantages in mind, and continue to build credit scores in the meantime.

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