Second mortgage Basics

A second mortgage is a second loan against your property. People will do this sometimes when they need money. Depending on the state of your first mortgage it can allow you to have access to a large amount of money but, like with all things there are risks involved. These risks can be in the APR rate or the default penalties for being late. There can be balloon payments and a wide variety of issues you could face by accepting the second mortgage. Money has a way of making one gloss over the finer points of issues that could come back and bite you like a rabid raccoon. There are points, closing costs to consider and a wide variety of issues. Educate yourself beyond the expectations of having a hand full of money by going through with the second mortgage. There are many things to be considered. People take second mortgages for a variety of reasons. Don’t let my concern scare you away from it. People do it for home improvements,

purchasing more homes, creating home equity lines of credit and avoiding private mortgage insurance. Not all uses of the second mortgage are wise so like with anything, you want to study and have all of your ducks in a row. Know exactly what you are doing and the second mortgage can turn out to be a blessing instead of a curse. Know that you can be risking your home by taking one and if you can’t pay the money back you could find yourself in a serious situation. You can also come out with an interest rate higher or lower than the first loan or mortgage you placed on the property. Second mortgages are not a bad thing. The key is to be money wise and educated about what you are doing.