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Niicss
Joined: 03 Oct 2005
Posts: 2617
Location: New Jersey
409.01 Dollars($)
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Hi Nancy,
You can use the calculator listed on this page to determine which option will be better for you, a second mortgage or a cash out refinance of your existing mortgage - http://www.mortgagefit.com/calculators/cashoutrefinance-secondloan.htm l
Using this calculator you will also be able to know which option will provide you maximum savings & higher cost offset.
_________________
Good is the Enemy of Great. |
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lyman
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| what is a silent second mortgage? is it a fraud? |
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miller_st
Joined: 17 Jan 2007
Posts: 917
168.92 Dollars($)
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It is one of the common mortgage frauds.
In this mortgage fraud scheme, the buyer takes/borrows the amount for down payment from seller by way of a non disclosed second mortgage. The lender thinks that borrower has brought his own money for making the down payment while actually the amount has been borrowed.
Further, this type of second mortgage is not recorded to conceal its status.
There are many other types of mortgage fraud schemes that you should be aware of. Please go through these two pages for more information about frauds to avoid falling prey to:
http://www.fbi.gov/publications/financial/fcs_report052005/fcs_report0 52005.htm#d1
http://www.realtor.org/rmomag.nsf/pages/BEvans200511212
Miller |
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adonis
Joined: 22 Oct 2005
Posts: 3852
Location: ALASKA
120.89 Dollars($)
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James Humphrey
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| I wanted to know which type of second mortgages are regulated as per UCCC. I searched through various sites but could not find any information on it. If any one can help, it would be great, thanks, btw, I am in Colorado. |
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carnahandavid
Joined: 21 Dec 2006
Posts: 239
58.41 Dollars($)
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James, Uniform Commercial Credit Code (UCCC) regulates 2nd mortgages which exceed the 12 percent per year annual percentage rate (apr) established in statute. And if the APR is below 12% then it does not fall under jurisdiction of UCCC.
For more information on this topic you can go through this following page: Colorado Department Of Regulatory Agencies, Office Of Policy And Research |
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larry
Joined: 27 Jun 2007
Posts: 3328
474.49 Dollars($)
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Hi James,
The Uniform Consumer Credit Code (UCCC) provides the borrower with consumer protection rights on certain loans. The second mortgages and home equity loans are subject to the UCCC regulations if the annual percentage rate (APR) on a variable loan goes beyond 12%.
But first mortgages and refinance loans are not included under the UCCC regulations. |
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wildstorm_films
Joined: 22 Aug 2007
Posts: 131
8.70 Dollars($)
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| I'd advise against getting a secong mortgage unless you can absolutely afford to pay on one. I took out a 2nd mortgage for the sake of my business and yeah, pretty much all the money I've made went paying on 2 mortgages plus a few credit cards that stemmed from my past. It just makes a real ugly mess especially when your single. |
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miller_st
Joined: 17 Jan 2007
Posts: 917
168.92 Dollars($)
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| Thanks Wildstorm for sharing information about your situation. So have you tried refinancing as an option? If making payments is becoming difficult then you need to look at options open for you. |
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larry
Joined: 27 Jun 2007
Posts: 3328
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Wildstorm,
I agree with you that unless one is able to pay off the first mortgage, he should not think of taking the second mortgage as the rates for the second loan is quite higher to bear. |
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swanson
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| does it make sense for the seller to take back a second mortgage while selling the house? |
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Niicss
Joined: 03 Oct 2005
Posts: 2617
Location: New Jersey
409.01 Dollars($)
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Many sellers take back second mortgages from buyer so that the sale of their home gets easy. And hopefully be able to get a better price for the house.
But it is risky to take back a second mortgage.
One has to estimate the benefit from increase in price to the risk of suffering loss in the transaction.
We can take an example to look at it:
As a seller if you can raise the house price from $400,000 to $410,000 by providing a 15 yr second mortgage of $20,000 for a rate of 10% & if appraisal comes to at least $410,000 then the ratio is 50% (ratio of increase in sales price to risk of loss, which is measured by the size of the second mortgage).
This would be a very good investment if the buyer repays according to the schedule. But if he doesn't then the seller would be losing out up to $10,000 (Total loss of $20,000 less the increase in price of the house $10,000). Sellers need to consider how much risk is involved in the transaction and if it would be profitable to take the risk.
_________________
Good is the Enemy of Great. |
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taffrey
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| I have received loan options of two mortgages, first mortgage for 6.5 for 80% of home's value and a second mortgage for 10%. The second mortgage can be a frm for 10.25 rate or at the prime rate but adjustable. which option should I select? |
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carnahandavid
Joined: 21 Dec 2006
Posts: 239
58.41 Dollars($)
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Hi Taffrey,
Presently the prime rate is below what you have been offered on the fixed second. But you have risk with taking the adjustable loan also.
You can take the adjustable rate option at prime rate for 15 years & make payments which would be if you had taken the fixed rate loan of 10.25%.
Doing this you will be able to pay off the 2nd mortgage early, thus reducing the risk of facing problems if rates go up sharply in future. |
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larry
Joined: 27 Jun 2007
Posts: 3328
474.49 Dollars($)
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Hi Tafffrey,
I personally feel that if the first loan is an FRM, it will be better if you go with it as you will be able to manage the payments better. If the second loan is an ARM, you may find it difficult to cope with the fluctuating rates and and as a result may face problem in repaying them. |
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