Home equity loan second mortgage is a type of loan wherein borrower uses equity built up in his home as collateral. Such loans are often used to finance some major expenses like home repairs, child’s education, medical bills, etc. The term home equity loan could be a confusing one. It can mean a second mortgage or it could simply be a home equity line of credit which differs from second mortgage.
On the other side, second mortgages which are structures as line of credit are known as Home Equity Line Of Credit which is shortened to HELOC. Loan of this type is adjustable rate. It is one of the most convenient ways when your cash needs are stretched over a period of time. A common example could be a series of child education needs, one followed by another. Borrower should make sure to understand his specific mortgage requirements and accordingly make educated decision while selecting second mortgage or home equity loan or even HELOC. However, there are some expert guidelines you can follow to improve chances of securing a better deal before you apply for a home equity line of credit or second mortgage.
Second mortgage places a second lien on one’s home. It is typically smaller in amount than primary loan, first mortgage. When you take out your second mortgage, generally you get a lump sum amount with fixed interest rate. But there are some second mortgages which have an adjustable rate. So, depending on your specific financial situation and budget, you should go for the right product. Typically, lender’s risk with second mortgage loans for people with bad credit is higher due to two factors; if borrower’s house goes through foreclosure, the first mortgage is paid off first. Another factor is bad credit history which is an evidence of applicant’s financial inability to pay off his debts on time. Hence, securing affordable rate of interest on HELOC, home equity loan or second mortgage could be challenging for a borrower. Moreover, if borrower is not well versed with the approval criteria set by second mortgage lender, things can be even worse. So, before you apply for home equity line of credit or second mortgage, a smart move is to get assisted by a highly qualified and experienced mortgage specialist who is totally reliable.
Seek reliable specialist assistance by finding a reputable online mortgage service provider which employs such specialists. Also such a provider that is associated with a large network of second mortgage lenders can help you to find best or cheapest quote available for your circumstances and budget. Moreover, with specialist’s guidance, you will get to know how to apply for a home equity line of credit or second mortgage and how to qualify for the same with affordable rate and terms.