Everyone Has Heard A Friend Or Relative Complain Abouthaving To Take Out A Second Mortgage But Dont Really Knowwhat That Means. Lets Find Out!The Real Term For This Is Called A Home Equity Loan. Thisis A Common Loan Type That Homeowners Can Use For Whateverthey Want.A Home Equity Loan Requires That You Use Your House Forcollateral Just Like A Normal Home Loan. There Aredifferent Types Of Home Equity Loan Out There And You Canalways Use The Money For Whatever You Want.College, Bills, And Home Repairs Are Some Common Uses. Youwill Need Outstanding Credit To Be Approved For This Kindof Loan Though.A Closed End Type Home Equity Loan Gives You A Big Chunk Ofmoney Immediately And You Cant Get Another Loan Until Thisone Is Fully Paid.The Amount You Can Get Depends On Factors Such As How Muchyour Home Is Worth, Your Income, Credit Score, And Similarthings. A Closed End Loan Usually Comes As A Fixed Ratetype And Allows You Up To 15 Years To Pay It Off.An Open Ended Home Equity Loan Is A Little Different. Thisloan Will Let You Borrow Money Whenever You Have A Need Forit.The Loan Lender Will Set Up A Line Of Credit That Is Prettymuch Based On All The Same Factors As The Closed End Loan.These Usually Have An Adjustable Rate And You Can Makepayment For 10, 15, Or Even 30 Years.So Why Are These Called Second Mortgages Because You Areadding Yet Another Loan Payment That Uses Your House Ascollateral And Adding Another Monthly Payment. Thoughtempting, It Can Cause You A Lot Of Problems In The Future.
