125% second mortgage

Guest 0.10 Dollars($)

Is it helpful to take 125% second mortgage?

Guest 0.10 Dollars($)

Hi,

This offer is not common nowadays. This looks initially attractive but is not very popular even amongst lenders due to high rates, negative equity.

If you are on a default you can't sell your house and may foreclosure or bankruptcy.

Angel

Samantha · Posted: Tue Jan 24, 2006 3:54 pm Post subject:

Hi Cztea,

The 125% second mortgage seems to be attractive because the interest rate charged here is less compared to a credit card account and they have lower monthly payments. Also, the interest expense is deductible from their federal income taxes.

But it has more disadvantages and so is not much popular. The charges to borrow money are very high on this loan. To get lower rates you have to pay more. You can't sell it without the acceptance of the real estate agent who may ask for huge commission.

There are a few areas where this mortgage may be successful -

If it doesn’t hit you with a large origination fee.
If you can a make a proper plan to pay off the mortgage as quickly as possible.
You have to be disciplined with your finances.

If all these conditions can't be met then it is not a favorable mortgage to take.

Before you go for such a mortgage, you should consider all the consequences that you possibly face.

God bless you.

For MortgageFit,
Samantha

Guest 0.10 Dollars($)

A 125% loan allows to borrow 125% of the homes value regardless of the equity you have in your home and you can utilize this loan for debt consolidation as the payments will gets reduced or you can use it for home improvements or making a big purchase.

Of course you have to consider all the disadvantages already stated here as your home is collateral for the loan.

Thanks

All times are GMT - 7 Hours

Page 1 of 1