Second Mortgage Loans after Bankruptcy
July 2, 2018
Second mortgage loans have become hugely sought after and it’s easy to see why. Second mortgages really are popular for those who want to free up finances. But when there has been a bankruptcy, won’t that cause problems? When there is a bankruptcy involved in your past, you are going to have a heap of trouble and, for some, they won’t find it easy to obtain a second mortgage. However, is it possible to obtain a second mortgage loan after a bankruptcy?
The Two-Year Catch
There is in fact a catch to those who want to take out a second mortgage loan after they have gone through the bankruptcy process including the fact that borrowers must go through a two-year waiting period. Waiting two years for a loan can appear to be such a long waiting time but it’s actually more useful than you think. During this two-year waiting period, you will have to continue to make the monthly payments on the current mortgage; in which you also build up your credit again. Obtaining second mortgage loans is possible after the waiting period if a lender deems you a good risk. click here for more details.
However, what you do have to be aware of is that the type of interest you’re likely to see will be slightly higher than before. Why are the interest rates potentially higher? Well, you have a bankruptcy already under your belt and that will more than likely cause your credit to take a hit. That can mean you are a bigger risk to the lender so, of course, they want to reduce their overall risk in you. For most lenders, they will set the initial interest rate at a higher rate before potentially reducing it after a few years. Second mortgage loans don’t always come with high interest but it is a factor to consider. If you have gone through a bankruptcy and want a second mortgage, you have to do your home to find the very best deals on interest. click for more details, : https://www.consumer.ftc.gov/articles/0227-home-equity-loans-and-credit-lines
Bankruptcy Can Make It Difficult to Get a Second Mortgage Loan
When you have gone through a bankruptcy it can be very difficult to be eligible for a second mortgage loan, even after the two-year waiting period. However, that doesn’t mean to say it can’t be possible for you. Yes, things will be considerably tougher but if you can prove you’re a good risk you shouldn’t have too much trouble. During the two-year waiting time, you can show you have the ability to be a good risk by keeping up with your payments on the mortgage as well as help rebuild your credit. Second mortgage loans need to be taken cautious when you have a bankruptcy under your belt.
Be Careful When You Have Been Bankrupt
Bankruptcy is a big problem for those who are seeking a loan, especially second mortgages and yet it doesn’t have to stop you. Remember, the whole point of bankruptcies is to give someone a fresh start after they’ve run into great difficulties but there are still regulations to follow. You have to be very careful when you are dealing with a bankruptcy and looking for a second mortgage. Second mortgage loans can be a useful solution but you have to ensure you are ready for the two-year waiting period.