Second Mortgages and Bad Credit

If you are interested in tapping into your home's equity to add cash to your pocket but have less than perfect, or even bad credit, you may have some options available. Second mortgages (also known as home equity loans) are available, even if you credit is damaged.

Second mortgages are basically a mortgage taken in addition to your primary mortgage. Because it takes a back seat to the first mortgage it typically comes with higher rates and fees than a primary mortgage. This is because if you default on one of the mortgages and your house is sold in a foreclosure sale the primary mortgage holder is paid in full first, then the remaining funds from the sale are used to pay off the second mortgage holder.

If you have bad credit and want a second mortgage you may have some options available. Many lenders will issue second mortgages even with poor credit, but you can expect to pay higher rates and fees than someone that has a good credit rating. In fact, with any loan the higher your risk to the lender the more you can expect to pay.

If you have bad credit, own a home and need cash you may have success with second mortgages.