Kevin Stith asked:




A mortgage is a long-term loan for a large amount, commonly taken for a property or a house. It is a kind of home loan except that it is termed for longer. Mortgages are available through a bank, private lenders, or property sellers.

One advantage of considering a mortgage loan over other kinds of loans is that there can be multiple mortgages for a particular property. Although more than one mortgage can exist, it is essential to pay off the mortgages in the order of priority, i.e., the first mortgage needs to be cleared of first, and then the second and so on. However, mortgages taken on an already mortgaged property carry higher rate of interest and so are to be considered only in times of dire financial status.

Second Mortgages have the same initial costs as the initial first mortgage. Also they carry a higher rate of interest than the first mortgage. Hence, second or third mortgages are expensive and hard on the pocket. Second Mortgages are usually given based on the amount of equity available with the property owner after the first mortgage. Such types of Second Mortgages are the least expensive kind of Second Mortgages because of the equity security.

As with first mortgages, a number of varieties of second and third mortgages are available. The most common is the mortgage given on equity left with the property owner after the first mortgage, as mentioned. Another popular kind is the line-of-credit mortgage, wherein a line of credit is provided to the property owner to be used as and when required, instead of providing the same as a lump sum as in the case of equity secured Second Mortgage.

Multiple mortgages can be taken simultaneously for building on some property or developing and renovating the same to rent or lease it out for some extra income. The calculation would be similar as if the mortgages were taken one after the other, rather than simultaneously. Also, they provide some extra cash when the property owner is strapped with all the EMI due for the mortgages.

Although a Second Mortgage is given as per the total property value after the house is mortgaged for a certain amount, some mortgage lenders also lend some extra amount that might be more than what the property actually costs. However, this is not a usual occurrence, and the lender needs to be sure that the same would be repaid back without any hassles. Also it requires approval from higher-ups due to the risk involved in loaning more than the property’s worth. The interest would be charged on the whole amount and is usually very high on the EMI.

All mortgage lenders would be able to provide ample advice on Second Mortgages at no cost. It is a good option to look into all the pros and cons before getting into an agreement for a Second Mortgage.

Shannon

Coral asked:


How many points does your credit score go down for every late mortgage payment made 30-35 days after the due date?

Is this hard to repair?

Shane

Jeanette Joy Fisher asked:




It’s every homeowner’s fantasy: to own their home free and clear. There are lots of legitimate ways to pay off your mortgage loan faster, but here’s the latest scam for folks hoping to eliminate their entire 30-year mortgage–in less than a year.

Here’s how it works. A “mortgage elimination” company posts ads in magazines, on the Web, in newspapers, or anywhere else they can find victims, promising that their system is legal and effective.

One of the strangest arguments, though persuasive to potential victims, is that lenders don’t really lend money. Although it’s a convoluted argument, the bottom line is that lenders borrow money from other lenders, and when the lending chain is followed all the way to its source, it turns out to be the federal government, which prints money on ink and paper, meaning that the money has no real value. Since that’s the case, it was really the victim who generated the money the first place. If the victim buys that argument, it means their mortgage note is meaningless and no money is actually owed.

Conspiracy enthusiasts love that sort of talk, especially if it’s back up by hints that agencies such as the FBI don’t want us to know about the true lending process, because they’re afraid that when the American public finds out, the banking industry will no longer be able to cheat innocent homebuyers out of their hard-earned cash.

The next step is for the homeowner to send a check for several thousand dollars, on the mortgage eliminator’s promise to guide them through the process and to represent them in court, if necessary. After that, one of two things will happen. Some mortgage eliminators will simply disappear, and the victim will never hear from them again. Others will actually deliver a program, which inevitably will lead to the homeowner’s loss of their home through foreclosure.

Here’s how that second option works. The mortgage eliminator tells the homeowner to go to the county clerk’s office and file a discharge of debt form, stating that the mortgage is paid in full. That’s not the case, of course, but when clerk records the form, it does appear as if the property is owned free and clear. Next comes the part where scam artists really clean up. With the property seemingly free and clear, the homeowner can now apply for more loans, and the proceeds are then split, with the mortgage eliminator often getting the larger portion. Everything seems fine–until the county clerk and original lender discover the scam and confront the homeowner, who is soon caught up in a huge legal and financial bind, as well as facing possible fraud and conspiracy charges and jail time.

The saddest part of this scam is that the most vulnerable people are those who are already facing bankruptcy or foreclosure. Everyone dreams of owning their home free and clear–but when it comes to paying off your mortgage, remember the old adage: if it seems to good to be true, it probably is.

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