A 125 second mortgage is a second mortgage option that allows you to borrow up to 125% of your home’s equity. It seems like an amazing deal and a way to get a nice large chunk of cash. However, you have to understand that is a loan you must pay back and it is a mortgage that can mean losing your home if you default.
Being responsible about a 125 second mortgage is important. You really have to see past all the hype and get to the real point of this type of mortgage.
What It Is Not
A 125 second mortgage is not a quick fix for your problems. It is a serious financial agreement. You should not borrow the money if you can not afford to pay it back or if you do not intend to use it in a manner that will be beneficial to you.
How to Use It and How Not to Use It
A 125 second mortgage can be a better option than a credit card. The reason for this is that you will get lower interest rates and be allowed to borrow much more. However, the monthly payments will be higher and you risk losing more if you default.
You should not get a 125 mortgage loan if you have no intention of using it to make your financial situation better. If you are going to simply blow the money and have not gotten your finances in order then you should not be borrowing it.
You have to use the money so that it works for you. You can pay off debts, improve your home and fix your finances. Use the money smartly and you will be glad you did. The loan will be much more beneficial for you.
How to Find One
You should easily be able to find a 125 mortgage loan. You can look with your current lender first since they are going to already know you as a customer. You will find this is probably going to be the easiest way to get a loan. However, your lender may not offer a 125 second mortgage. You can then shop around. Be sure to check out a few lenders so you get the best rates.
A 125 second mortgage can be a great way to get your finances back into shape and help you avoid the trap of credit debt. You can use the loan to better your finances and help build up more equity in your home. It can be a wonderful option if you are smart about it and be careful when getting into the loan.
A 125 second mortgage loan is a mortgage that allows you to borrow up to 125% of the value of your home. They are highly publicized as being the solution to a homeowner’s money problems. The real facts, though, show that a second mortgage of any kind will not save you if you are in serious financial trouble. In fact, it could take you further into debt. That is why completely understanding a 125 second mortgage loan is very important. You can not rely on the hype from lenders. You have to get the facts yourself so you can really see what you are getting into.
The General Details
A 125 second mortgage loan usually offers some very impressive deals. You will get a lower interest rate than you would through a credit card. This is a bug selling point because when you need some extra cash, credit cards are usually the way to get it. So, with a 125 second mortgage loan you can get that extra money and end up paying less in the end on interest. Additionally, a 125 second mortgage loan offers a lower payment then a credit card loan.
The thing to keep in mind, despite these tempting deals, is that a second mortgage is a loan on your home equity. When you take out this loan you will have to pay the monthly payments for up to 20 years, depending on the length of your mortgage. If you default you risk losing your home and ending up in major debt.
The Risks
As mentioned, a second mortgage, like your first mortgage, is taking with your home as collateral. You are risking your home and that is something serious. You have to make sure that you can afford the loan before getting into it.
With a 125 second mortgage loan there is usually a charge for the loan. An average rate is usually 10% of the amount borrowed. This is a lot extra, depending on how much you are borrowing. That will also accrue interest and end up to be much more than 10% in the end. You have to watch out for this charge and make sure it is reasonable.
Also keep in mind that you have to pay off this second mortgage should you decide to sell your home. You should be very sure that you will not sell soon or you could end up making no money off of your home when you so sell it.
When a Second Mortgage Is Worth It
Obviously, a 125 second mortgage loan is not for everyone. However, for some people it is a good solution to money issues. If you:
- Find a low origination fee.
- Can afford to pay off the mortgage quickly through extra payments each month.
- Are sure it will work for your situation.
If you meet all three of these factors then you can probably take a second mortgage with no problems.
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