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2008-03-20 08:38:39
How Does a Second Mortgage Work?
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 Second mortgages can be quite misunderstood. Sometimes the idea of a "second mortgage" can sound much scarier than it actually is. Here is a quick primer for you:
A "second mortgage" is just like it sounds. You are adding a second company on to your mortgage, and in return, you are borrowing money from this company. This is also called a "secured loan", as the money that you are borrowing from this second company is secured by the equity in your home. Meaning, if you default on your payments, the second company can still get some or all of their loan back.
"Second mortgages" can be used for a number of different reasons. They can be used to finance home renovations, they can be used to consolidate debt, or they can be used to purchase a new vehicle. There are many more possible reasons why you may entertain the idea of a second mortgage, but these are the most common. Banks prefer to offer second mortgages to people who are either a) improving their financial situation (debt consolidation) or b) adding to the value of their homes (home improvements).
Why would you want to take out a second mortgage, and not just take out an unsecured loan? Why would you want to add another company to your mortgage?
The answer is simple. Second mortgages offer many advantages over unsecured loans. These advantages include:
a) Higher borrowing power
b) Lower interest rates
c) Flexible repayment schedules
Depending on the amount of equity that you have in your home, many banks or lenders will loan you up to 100k pounds. Try borrowing that much with an unsecured loan!
Also, the interest rates are much lower. A standard second mortgage interest rate is 8.5-9%; compare that to a standard rate of 15-20% for an unsecured loan.
Also, with a second mortgage you can usually take up to 25 years to pay the second mortgage off. The typical maximum repayment period for an unsecured loan is 5 years.
How do you apply for a second mortgage? That's the easy part. Simply click on this link and you will be taken to our two minute application form. Upon completion of the application, an agent from a lending second mortgage firm in the UK will contact you via phone or email. You are under absolutely no obligation to take out a loan from them.
Apply today!
Apply for a Lending Place secured loan today!
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Applicants with bad credit history, Mortgage Arrears, Missed payments or CCJs are welcome.
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