Few people have perfect credit, but with a second mortgage and the right mortgage broker you can repair your credit and get the money you need to make life a little easier. First thing you should know is just because you have bad credit doesn’t mean that you won’t be able to get a decent loan. If you can’t get an ”A” grade mortgage, the bank may offer you a high risk second mortgage; it’s always best to consult with a mortgage broker to make sure that you’re getting a good rate and fixing your credit report.
Should You Take on Another Mortgage?
A second mortgage might seem like a really bad idea when you’re already in debt, but it can help. Depending on what you need your money for and how fast you need it will determine what kind of mortgage you get. If you need your money right now, you may want to get a fixed dollar mortgage to pay all of your bills off. If you need money and you’re older, you can choose a reverse private mortgage where you can live off the money and the bank takes the house once you’re gone. But how do you repair your credit with a second mortgage?
Why Do Second Mortgages Work?
Your credit score is based on something known as “debt to credit ratio”. How much credit you have available to you (your $5,000 visa card for example) versus how much debt you have. If you owe $4,000 on your $5,000 Visa card, you have a high debt to credit ratio and you wouldn’t be a good candidate for more credit. But if you take out a second mortgage and pay it on time for 6+ months, your credit score will rise since it’s an account in good standing that you’re paying off.
Can More Debt Really Repair Your Credit?
Before you apply for a second mortgage, you’re going to want to take a long hard look at your credit and see where you are. If you find incorrect information reported, you will need to dispute it; contact the lender that put the incorrect information on your credit report and ask them to request a correction with the main three credit bureaus. If you have bad credit card debt or other debts that you need to pay down, do it!
A second mortgage can help you pay off these debts quicker and easier, but you need a mortgage broker to help you get a good rate. While you may think that going with a bank is the best way to get a good loan, it doesn’t always work this way. Banks don’t really have to work to get you the lowest interest rate on your second mortgage; a broker, on the other hand, shops around for you locally and finds you the best rate for your situation.
A second mortgage can be a great way to repair your credit; just make sure you find a mortgage broker to help you get the best rate for your credit situation.
Contact us today and see what we can do for you.