The article below discusses the possibilities of obtaining a 2nd home mortgage loan on the basis of poor credit rate. First of all, what is 2nd mortgage? It is the process of getting a second loan on the property that is already mortgaged. There are numerous people who want a second mortgage loan but it is difficult to gain one. Here are some considerations:
1. Lenders- You should seek secondary mortgage from the same lender who gave the first mortgage loan. You can seek another lender but it is not advised. The conditions, for the lender, rests on 3 facts- current market value of the property, outstanding amount from the first loan, and the credit history. Only after analyzing these 3 factors will the lender decide upon the loan. Obviously, the 2nd mortgage rate will be high than the previous one. Remember, if you fail to return the second mortgage loan in time, the property will be forfeited.
2. 2nd Mortgage Rate- Rate of interest is going to be undoubtedly more than the 1st mortgage as the lender is taking a big risk to finance you. Even if the financial condition for you is stable and you know that there will be no delay in returning the loan, still the interest ill be high. Another reason is poor credit. Poor credit home loans are available but they are obtained only after careful scrutiny of past credit history and credit rating.
3. Amount- The amount of loan varies; it can be more or less than the amount you wanted initially. Even a slight delay in repayment can make the lender open the property for foreclosure. As the borrower, you have no right to claim money from property sale until all, the 1st and 2nd mortgage, is fully settled.
Finally, the duration is much shorter than 1st mortgage requires speedy repayment.