Stopping a Home Foreclosure with a Second Mortgage
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With more people than ever facing unemployment these days, many of them stand to lose their homes as well if they are not able to keep up with the mortgage payments. However, there may be cases where you will be able to prevent your home from being foreclosed upon by means of a second mortgage.
#1 – Use it to bring your Primary Mortgage Current
If you already have a private home loan in Ajax, but have not been able to keep up with the payments on it, you may be able to make use of second mortgages to help see you through a difficult financial patch - but only if you use it to bring your existing mortgage current. In some cases, you may even be able to obtain the second mortgage at an excellent interest rate as well, which will save you money in the long term. Using private home loans in the form of a second mortgage will help stop the foreclosure process and prevent your family from having to move.
#2 – Reduce other Debts at the Same Time
If you are unfortunate enough to be facing the possibility of foreclosure, chances are that you have a fair amount of other debts that are overdue as well, such as utility bills, credit card accounts, store cards or even long overdue medical bills. Second mortgages can not only help prevent the bank from foreclosing on your home; they can go a long way in reducing the amount of money that you have to repay each month to service outstanding debt. While you will still have to repay the outstanding debt, the amounts owing can all be consolidated into a second mortgage, leaving you with one monthly bill to pay instead.
#3 – Save on Interest
Once you have stopped your home from being foreclosed upon by means of a second mortgage and have used the remainder of your second mortgage to pay outstanding debts, you will be able to save a substantial amount of money on interest in the long term. The reason for this is that interest rates on mortgages are far lower than those charged on credit cards, store cards and other forms of consumer credit. The rate at which interest will be charged on your second mortgage can vary according to what your current credit score is.
#4 – Equity will be considered
An important factor that will be considered when applying for private home loans in Ajax or second mortgages is how much equity you have in your existing home. If you have less than 20% equity, you may find it difficult to obtain a second mortgage - and if you do, you may find that the interest rate will be higher until you have repaid at least 20% of it. It is also essential to ensure that you are still within the redemption period of the foreclosure process before applying for a second mortgage; otherwise it may not be possible to save your home.