Guaranteed Second Mortgage Loans

Guaranteed second mortgage loans, otherwise known as home equity loans, will allow a consumer to turn the equity in the home into cash that can be used for any purpose. When considering taking out a second mortgage loan, the first step is to know how much the home is worth. This is usually accomplished by having an appraisal performed on the property. If the appraisal value is higher than the first mortgage balance, there is equity in the home. These loans allow the consumer to make good use of the money for home improvements, remodeling, or to pay off other high interest debts.

If the home is worth one hundred thousand dollars and the consumer owes seventy thousand dollars on the first mortgage, refinancing will only offer eighty percent of the home value, or eighty thousand dollars. This would leave the consumer with ten thousand dollars in cashed out equity. With guaranteed second mortgage loans, in most cases, the consumer would be able to get thirty thousand dollars, which is all of the equity. The only drawback to this is that there be another monthly payment, but it may be well worth it if the cash is very important.

Pursuing second mortgage loans are very common in today's lending arena. People may need cash to pay off other debts or to make upgrades to their home. Others might use a second mortgage loan to cash in on their home equity to put money in savings or to pay for certain high dollar items that might be needed right away, such as a new vehicle. This process can be a great asset to a homeowner, especially if they plan on staying in the home. And if a homeowner is planning on selling in the future, it may be best to go ahead and get the equity out in the present time to make some improvements to increase the curb appeal of the home and likewise increase the chances of selling the home more quickly.

Repairing credit can be another important reason to pursue guaranteed second mortgage loans. If the consumer has charge-offs in his or her credit history and perhaps settled with the creditors, the equity in your home can be used to pay off these debts. This will clean up the consumers credit. Many debt management companies will offer the service of a second mortgage loan specifically for this purpose. In this situation, they normally find out what outstanding debts the consumer has and will pay the creditors directly, leaving the homeowner with the balance of the equity after the debts have been paid. Seeking this service can greatly improve a consumers financial situation as long as the equity is used wisely. "The law of the wise is a fountain of life, to depart from the snares of death." (Proverbs 13:14)

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