Bad Credit Second Mortgage

Second Mortgage

Second mortgage is a loan taken against your property which is in addition to your first mortgage. This mortgage is secured by the property used for the 1st mortgage. The second mortgage is also known as subordinate lien. The property deed considers the second mortgage in the 2nd position. Where the borrower defaults on the mortgage repayment the first mortgage lender is paid in full and the remaining is paid to the second mortgage lender.

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In order to compensate with the risk factor, the second mortgage lender charges a fee called as the origination fee. This mortgage comes only with a higher rate of interest.

Bad Credit Second Mortgage

Those borrowers with credit problems seek a second mortgage of their property primarily to repair their bad credit score. Second Mortgage is also available to borrowers with a FICO score as low as 550 points. Bad credit second mortgages are available with the following features:

• Accepting past bankruptcy record
• No Mortgage Insurance
• With interest only payments
• Low FICO rating

Both fixed and variable rate second mortgages are offered to bad credit borrowers. Second Mortgage loans help borrowers reduce their liability towards loans by way of low rate second mortgages.

Reasons why Bad Credit Second Mortgage is opted

The following reasons can be attributed to a second mortgage option by a bad credit borrower.

• The current loan / credit card rates are higher than the second mortgage rate.
• The fixed rate second mortgage does not charge the borrower with annual fees which are lately charged by credit card and home equity lines of credit.
• Second Mortgages help borrowers repair their credit score and put them back in track.
• The interest on second mortgage loans are tax deductible, while such an option is not available with credit cards.