What Is A 2nd Christian Mortgage
Answering the question of what is a 2nd Christian mortgage can help many homeowners who are strapped for cash and are looking for ways to cover debts with a loan that is not too expensive to handle within the regular monthly budget. The short answer to what is a 2nd mortgage would be a lending agreement based on the equity a homeowner already has in his property and would be subordinate to the main or first mortgage. In other words, in a worst case scenario such as a bankruptcy or loan default, the first mortgager gets his money from the sale of the property to cover the balance of the loan and the holder of the second mortgage gets whatever would be left over. A second mortgage would be the official name for a home equity loan and is looked upon by the IRS as a mortgage, allowing the homeowner the opportunity to claim the interest paid as a tax deduction. That feature sets the lending agreement apart from other types of personal loans that someone might secure.
What is a 2nd mortgage interest rate as compared with a first mortgage? The answer would be that because the lender issuing the second cash advance on the property would be subordinate to the first mortgager in terms of recovering money to a default or bankruptcy, the interest rate on a home equity loan are a little higher than a conventional property cash advance and are typically variable in configuration. These loans have payback terms from one year to as many as twenty, depending on the structure of the agreement. There are times when the holder of a home equity loan will purchase the first property cash advance when a homeowner defaults on their loan and then forecloses, leaving the second loan holder as the owner of the house. "For I say, through the grace given unto me to very man that is among you not to think of himself more highly than he ought to think; but to think soberly, according as God hath dealt to every man the measure of faith." (Romans 12:3)
What is a 2nd mortgage requirement for obtaining a home equity loan? Actually there are a number of requirements that are considered important for the deal to be made. The first would be that there be significant equity in the house. Most banks which are conservative in their financial dealings will usually take the original sale price of the house, subtract what is still owed and then lend a percentage of that remaining equity. The percentage could be as low as fifty percent or as much as seventy percent, depending on the lending institution's policies. The second requirement would be a low debt to income ratio. This is figured by adding up all the monthly payments the potential borrower has including the mortgage payment and calculating what percentage of the monthly income would be going towards debt repayment. Banks want to see a lower than forty percent ratio.
Thirdly, when answering the question of what is a 2nd mortgage requirement for securing a home equity loan, the answer would be a high credit score. The average American has a credit score of six hundred twenty. Many lenders require a credit score of at least six hundred and forty. Late credit payments, skipped payments and a high amount of open and active accounts will lower the credit score of the consumer. Finally, the last requirement of the lender would be a solid employment history. This means that the borrower will have needed to be at a job steadily for at least a year and may be more depending on the policy of the lender in question.
So what is a 2nd mortgage lender that doesn't have as high requirements for lending as a bank or credit union? The answer to that question would be a loan company that doesn't deal with depositors but rather with high risk investors that will take a chance with bad credit or poor credit customers. In the case of a loan company, the interest rates will be higher, the points paid on the loan will be increased, but a higher debt to income ratio and a lower credit score will not be scrutinized as closely. Both banks and loan companies will charge the borrower points on the home equity loan, and each point represents pone percent of the entire loan. This money would be due at the time of the loan but can be rolled into the mortgage amount to be repaid.
What is a 2nd mortgage loan advantage? The first advantage would be the ability to use money already socked away in the form of property equity for any reason under the sun. No questions are asked about the use of the money. So a vacation, a house repair, college tuition, a new car, or any of a hundred other reasons can be funded by a home equity loan. The second advantage would be that there is at least some tax breaks with this loan that no other lending agreement really offers. But before ever taking out such a lending agreement, a person should check with his/her tax advisor to see how this would affect personal tax issues.
Finally, what is a 2nd mortgage loan disadvantage? The most glaring one would be using the money for a fleeting pleasure whose glow is quickly extinguished but the payback could be for years. If a lot of pictures of a European vacation are enough to quell the monthly irritation of paying for it over a number of years or the mounting mileage on what was once a dream car which may take twenty years to repay through a home equity loan, have at it. But paying for a child's education or reroofing the house, or paying off high medical bills may make a lot of sense when the mailman delivers the bill every month. There will always be a payback for everything; just ask Judas.
Refinance Second Christian MortgageA refinance second mortgage is a method by which a homeowner can capture equity that has been growing on a house through regular monthly house payments and use that equity for other pressing financial issues. A house mortgage has been likened by some financial advisors to a piggy bank that is constantly being fed by the home owner and can be turned upside and shaken to retrieve cash for rainy day expenses. However, this equity building takes a while because in the initial years of a property lending agreement much more interest is being paid than principle. And since some borrowers choose interest only lending agreements or agreements that are balloon type, very little equity is available and the house shaking or the refinance second mortgage opportunity is probably not an option.
But a refinance second mortgage loan is certainly available for those home owners who have been faithfully paying their monthly mortgage payments and had gotten a low rate fixed property lending agreement or adjustable rate mortgage that has remained low in interest over the years. And for those made a ten or twenty percent down payment on their initial property lending agreement, or had paid more on the principle each month than was required, much more equity is available by about the tenth year of the first property loan. In these cases, a refinance second mortgage is very possible in order to cash out on the equity available and perhaps be able to get an even lower rate of interest.
Let's take a look at how this might work in the life of Mr. and Mrs. "I Feel a World Cruise Coming On." This couple has worked long and hard over the years and now wants to enjoy some of the fruits of their labor. Fifteen years ago the twosome bought an eighty five thousand dollar house somewhere in the southwest which has been recently appraised for one hundred and forty thousand dollars. Because Mrs. World Cruise has been putting an extra hundred and fifty dollars on the principle each month since owning the house, the amount owed on the house has dropped to fifty two thousand dollars, leaving them with an equity of eighty-eight thousand dollars. While the duo thought long and hard about getting a home equity loan, after talking to a financial expert the decision was made to get a refinance second mortgage lending agreement. In this type of lending agreement, the couple would refinance the first property lending agreement a second time and cash out some of the equity for that three month cruise.
"For whosoever will save his life shall lose it, but whosoever will lose his life for my sake the same will save it." (Luke 9:24) The decision was made by the World Cruises to get a refinance second mortgage loan for eighty thousand dollars. This would allow them to go from an adjustable rate mortgage to a fixed rate property lien and only up the monthly house payment fifty dollars from the original residential lending agreement. After paying for the points for the new refinance second mortgage, the couple would have about twenty five thousand dollars to get a lower berth room on an around the world cruise that Mrs. World Cruise had always dreamt of taking. This was all made possible by the fact that this hardworking couple had maintained excellent fiscal practices over the years and could easily breeze through the financial vetting process for this second go around at a primary mortgage lending agreement.
The couple would be able to bask in the beauty of Cape Horn and the wonders of Hong Kong because of an excellent credit score. While the average American's credit score is about 620, the husband and wife had been fortunate to maintain a score of over 700 during their years together, and recently the score had been rising higher. Being able to pay off debts had reduced the debt to income ratio to almost twenty two percent and that helped in raising the credit score higher. For many Americans who live paycheck to paycheck, a debt ratio above forty percent is strangling the ability to live with discretionary income to save and use wisely. And the ability to get a refinance second mortgage lending agreement would certainly be out of the question ending the possibility of getting help to pay off high interest credit cards and other financial strangleholds.
Someone once said that it's a shame that youth is so unwisely spent on young people! After all, so many of the mistakes that haunt us all our lives are made at a time when all knowledge is assumed to be a personal accomplishment. But as so many people finally admit, by the time the age of thirty rolls around parents seem to suddenly have gotten a whole lot smarter! For many, poor money decisions made during young adult years are a shadow that cannot be shaken off as time moves on and so world cruises or college tuition or that extra bedroom addition and a small mother-in-law house aren't possible. And the hope of starting over isn't even a tiny blip on the radar screen.
Getting to refinance a Christian mortgage a second time is a great opportunity to do something over again that maybe wasn't quite right the first time. Getting a lower interest rate or being able to make the mortgage lower a second time around can really change a family's financial situation. Of course, a lot of decisions aren't possible to redo. Some of them are absolutely tragic. Living like God doesn't count and dying without His forgiveness is the worst unfixable decision anyone can make.