DECEMBER 12TH, 2018

Second Mortgage Debt Consolidation

In Debt? Concerns about your financial condition? Try obtaining a Second Mortgage for Debt Consolidation. Here are a couple of methods consumers should look into: A great deal of homeowners incorrectly believe that a Refinance and a Home Equity loan are the same thing BUT they are not; here’s the differences:

Refinance – with a refinance, the old or first mortgage is paid off and any cash-out to consolidate bills or provided to you at close is rolled together into one new loan that has one rate and one payment. For the majority of homeowners, refinancing is the single best method to get cash and consolidate debt.

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Home Equity Loan – a home equity loan is synonymous with a second mortgage. Should a consumer take out a home equity loan (fixed amount or line of credit aka HELOC), the consumer will have a second loan and a second mortgage payment with usually a higher second mortgage rate.

Recently, there has been a substantial increase in the amount of consumers looking to use their homes “as a means to get access to extra cash” when they need it most, and, one of the best ways to accomplish this is through a second mortgage. A consumer may obtain Second Mortgage Debt Consolidation loans offered by various lenders. In essence, a Second Mortgage is an additional mortgage placed on a property and it can be used for a multitude of reasons including Debt Consolidation.

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General Overview for Second Mortgage Debt Consolidation

A consumer’s home is likely their biggest asset. Recently, there has been a substantial increase in the amount of consumers looking to use their homes as a means to get access to extra cash when they need it most, and, one of the best ways to accomplish this is through a second mortgage.

Disadvantages of Second Mortgage Debt Consolidation

The main disadvantage is there are a few issues to keep in mind, even though it may all sound quite simple. Most importantly, do not take out a second mortgage on a home unless a fair amount of equity has been built up in the property already – simply put, it means that payments were made on the original mortgage balance for a sufficient amount of time. Even if a consumer does not have much equity accumulated, they may still be able to obtain a second mortgage but there are drawbacks to this scenario including rates will be much higher and the amount that can be borrowed will be much lower which does not allow for a good financial opportunity.

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