2nd Bad Credit Mortgage

Many financial experts have recently come out to advise homeowners to pay off their credit card debt by getting a second mortgage on their home. The second mortgage offers many benefits and is less expensive than the credit card debt. This becomes a problem for those who have bad credit. Second mortgage options are not as wide for those with bad credit as they are for those with good or even average credit. There are options, however for getting a 2nd bad credit mortgage.

A 2nd bad credit mortgage will have interest rates higher than the second mortgages offered for good credit. It is possible, though to shop around for the best interest rate by using an online mortgage search website. These websites will search through a variety of lenders to find the best option for you. While getting approved for a bad credit second mortgage can be difficult for some, it is not impossible. A lot depends on the exact nature of what is on your credit report. If it’s just a few missed payments on a couple of accounts, it could be overlooked. Defaulting on thousands of dollars without repaying may pose some problems. Either way, if the second mortgage will help your financial situation, it is at least worth the attempt.

What makes it easier to get a second mortgage than a personal loan is that you have collateral with which you can work with. This collateral is in the form of the equity on your home, that portion for which you have already paid your previous lender. 2nd bad credit mortgage lenders exist and are willing to work with you because they know they have some protection in being able to take the equity from your home.

Bad credit second mortgages are ideal for several different reasons. First, the money can be used to pay off existing, higher interest debt. Secondly, the new loan is a chance to improve your credit score by making timely payments. Once your credit score is improved, a new world of options will open.

Before applying for a 2nd bad credit mortgage, you should first make sure that you have equity in your home. If not, no lender will write a new mortgage for you. Even the interest rate is high, the money from the second mortgage can put you in a position for a better future, not only because of credit card debt, but the money could also be used to pay education expenses that will lead to a better-paying job.

The best bet for those who wish to receive a 2nd bad credit mortgage is work with a mortgage broker or a mortgage broker website. Mortgage brokers have the advantage of giving you several different options at once with the ability to compare and contrast the details. You can then select the 2nd bad credit mortgage that is right for you. Another option is to contact the lender you used for your first mortgage. Since you already have a relationship with them, they are often more willing to work with you again than a lender who doesn’t know you.