Welcome to Second Mortgage Guide
First Mortgage Second Mortgage Refinancing Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Risks of a Second Mortgage Loan
from:A second mortgage loan can seem quite tempting, but it is very important to understand that it is also quite risky. A second mortgage loan can put you at greater risk upon default than your first mortgage.
How a second mortgage loan works is that it is second behind the first mortgage. If you default on your second mortgage, no matter the status of your first mortgage, you can still lose your home. What will happen is the lender will pay off the first mortgage so they can then seize your home.
It is a huge risk because you will lose your home and have to pay off the two mortgages. A second mortgage loan can put you in financial troubles that could ruin your credit and financial stability. That is why you must understand the risks.
Penalties to Think About
Default penalties – This penalty is charged if you are late or miss a payment. One missed payment could rack up some huge penalties that could make it very difficult for you to get back on track. Avoid a second mortgage loan with this penalty.
Prepayment penalty – While it may seem silly, lenders do charge you fees for paying off your loan early. That is because they are losing out on all the interest you would have paid if you had paid out the whole length of the loan. You can avoid these, though.
These two penalties are something to consider. Both can really mess up your plans to pay off your second mortgage loan and could put you at risk of default. Watch out for the penalties and avoid them if possible.
Know the Costs
You may find a loan with great terms and rates, but you also need to remember the costs associated with actually getting the loan. You will need to pay:
- appraisal fees
- application fee
- closing costs
Make sure these costs won’t put you in a bad financial situation. You do not want to end up late on your first loan payment.
The Risk
When you are considering a second mortgage loan you have to make sure you can afford it and that goes well beyond being able to afford the monthly payment. If your budget is tight you can afford to have surprises come up that require extra money.
Overall, you really just have to make sure a second loan fits into your budget. If you are smart about it and figure in all the costs and possibilities then you should be able to get a second mortgage loan without any fear of losing your home.
First Mortgage Second Mortgage Refinancing Specific links
First Mortgage Second Mortgage Refinancing News
Mortgage Origination Forecast Increased by Nearly $200 Billion by TSA - LoanSafe
 The Mortgage Reports | Mortgage Origination Forecast Increased by Nearly $200 Billion by TSA LoanSafe MBA now expects that mortgage originations will reach $1.28 trillion in 2012, up from $1.26 trillion in 2011. Refinance originations are now expected to total $870 billion in 2012, an almost identical amount to 2011. MBA is slightly lowering its ... Don't HARP on it, refinance program too good to pass up 2012 Originations Now Expected to Exceed 2011 |
Mortgage comparison-shopping: How to read good faith estimate - Community Voice
 Mortgage Rates & Trends (blog) | Mortgage comparison-shopping: How to read good faith estimate Community Voice By Scott Sheldon May 24, 2012 12:51 pm Taking out a mortgage loan requires careful consideration of all the costs associated with a purchase or refinance transaction. For many, who do their due diligence of mortgage comparison shopping, reading, ... MBA Increases Estimate for 2012 Originations by Nearly $200 Billion Current Mortgage Rates for Wednesday, May 23, 2012 |
React & Act: What is second-mortgage debt? - California Watch
 California Watch | React & Act: What is second-mortgage debt? California Watch To understand Rick Jurgens' article on the second-mortgage debt and one Texas firm's aggressive collection methods, you must first look at the origins of the mortgage crisis. Here, we provide an explainer, a glossary of terms, a guide to available ... |
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... - MarketWatch (press release)
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... MarketWatch (press release) With Adjustable Rate Mortgages (ARM) representing only about 7% of new loan originations in the market, many consumers are seemingly unaware that these adjustable rate loans are worth a second look. As refinance volume has increased year over year, ... |
Wonkbook: The bad news Brits - Washington Post (blog)
Wonkbook: The bad news Brits Washington Post (blog) Calls for mortgage refinancing are gathering steam. "Mark Zandi, chief economist with Moody's Analytics, told a Senate panel Thursday that he supports a measure to eliminate hurdles for homeowners to refinance into lower interest rates under the Home ... |