How To Qualify For A Second Mortgage
A second mortgage is the best solution for you if you can't qualify for a regular mortgage. Otherwise, in most cases, a second mortgage is more expensive than the benefits it provides.
If you need some cash FAST, like in a day or two, a second mortgage is a good option. It is also a good option if you can't qualify for regular bank financing.
Use it as interim financing while your refinance (or other money) comes in. In most cases refinance or financing through the normal mortgage channels takes about two to three weeks.
If you are buying a new house and selling your old one and need interim financing, you don't need a second mortgage. Your bank / trust company will provide the financing you need relatively inexpensively. In most cases they won't even charge you a processing fee.
Regular second mortgage interest rates start around 10%-14%. The rate goes up to as much as 18% if the lender considers it a high risk loan. In addition to the high interest rates you would also have to pay fees of a minimum of $1,000 for a small amount of money to as much as 10%-15% of a larger amount of money.
Shop around. You need to know your options before you sign on the dotted line. In the end it may not be as bad as I make it sound.
A second mortgage is provided by private companies or individual investors. BE VERY, VERY CAREFUL!! There are people out there who are more than happy to take advantage of your dire need to have money quickly. If you are not careful you could end up paying as much as 60% including interest and fees. It is easy to get sucked into this situation without realizing it. BE CAREFUL! DON'T DO IT! YOU HAVE OPTIONS.
If you go through a mortgage broker you can avoid a lot of pain. Licensed mortgage brokers know the legitimate sources for a second mortgage. If ever you use a mortgage broker, for your own good, go through a mortgage broker for a second mortgage.