My wife recently lost her job, and our finances are too small to pay all of the first and second mortgages on our home. Is is smarter to pay some of the first mortgage, or all of the second mortgage? The first mortgage is with Indy Mac, second is with CIT. Anyone have any luck modifying loans with them? Since I am only one month behind with Indy Mac, they will not work with me. Thanks.

Paying "part" of your payment is not appreciated by the lenders unless you call first and work out a payment plan. Otherwise the entire amount you send them is credited to interest and does not pay down the loan at all. You want that loan to disappear.
Apx 4 out of 100 people who ask for a loan modification can get any help. Most of the modifications are to give you 6 months of no payments at all. This money is added to the "end" of your loan, so it is not a gift.
In some cases, the smartest move is to ask if they will accept a deed from you today. And you move into a small apartment or with family. You avoid a foreclosure on your record..

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Many people have heard the term second mortgage used in reference to a loan on a home.

What does the term “second mortgage” really mean? As far as real estate is concerned, a single piece of property can have multiple loans, or mortgages against it.

The loan that is first registered with the county or city is known as the first mortgage. The loan that is registered second is known as the second mortgage.

This has many benefits over a normal bank loan.

There can be as many mortgages on a property as there are lenders willing to provide funds.

If a loan happens to go into default, the loans are repaid in the order they were registered.

So, the first mortgage is paid first, the second mortgage is paid second, and so on. Because of this, subsequent mortgages are more of a risk for the lender.

In exchange for assuming the risk of lending a second mortgage, lenders often charge higher interest rates.

In many cases, the second mortgage has a shorter term than that of the first mortgage. Also present with many second mortgages are fixed amortization schedules and balloon payments.

Homeowners have many reasons for taking out a second mortgage. Some of the most common reasons are for home improvement, increasing cash, paying off other debts, or investing in a business.

In some cases, the second mortgage is used as a down payment for the first mortgage when the home is purchased.

When you are choosing a lender for a second mortgage, you will use many of the same considerations that came into play for your first mortgage.

The interest rate, repayment terms, and fees associated with the second mortgage are some of the primary factors that might cause you to choose one lender over another.

The repayment terms are another factor that you should use to determine a lender for a second mortgage.

Some second mortgage loans can be repaid in as much as 15 or 20 years. However, some loans must be repaid within a year.

Generally, the shorter the repayment period on the second mortgage, the higher the monthly payments will be. You should choose a loan with repayment schedule that falls in line with your ability to repay.

To obtain the loan, you will usually have to pay a fee that is a percentage of the loan. Your lender may refer to this percentage as “points”.

One point is equivalent to one percent of the amount that you borrow. Therefore, if you borrow $10,000 with five points as the fee, then you would pay $500 (5%) in points.

The number of points changed will vary by lender. This is where shopping around will pay off for you.

In some states, there is a limit to the amount of points a lender can charge for a second mortgage.

Check with a banking commissioner or state consumer protection office to find out if there is such a limit in your state.

Make certain that you get the amount of the fee in writing from the lender before taking the loan.

Gerald Mason
http://www.articlesbase.com/real-estate-articles/benefits-of-a-second-mortgage-83170.html

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Jacksonville Bankruptcy Attorney Chip Parker explains how a homeowner can wipe out (strip) a second mortgage or HELOC in a Chapter 13 bankruptcy.

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http://www.cambridge-credit.org — President Obama recently announced that his housing initiative was ready to expand to include second mortgage modifications. The Administration believes that ensuring a homeowners ability to stay in their home is critical to stabilizing the housing market. Once thats achieved, the logic is that the overall financial system will recover in turn. Watch this week’s webisode from Cambridge Credit Counseling Corp. to learn more. Host: Community Outreach Director, Thomas J. Fox.

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So what is a second mortgage? A second mortgage is a secured loan (or mortgage) that is subordinate to another loan against the same property. More specifically, the second loan in sequence. In real estate, a property can have multiple loans against it. The loan which is registered with county or city registry first is called the first mortgage. The loan registered second is called the second mortgage. A property can have a third or even fourth mortgage, but those are rarer. Second mortgages are called subordinate because, if the loan goes into default, the first mortgage gets paid off first before the second mortgage gets any money. Thus, second mortgages are riskier for the lender, who generally charges a higher interest rate.
How can you benefit from a second mortgage? Well you can use the money gained from the second mortgage to do any number of things. You can put the money toward paying off various debts including credit cards, car loans, boat loans, school loans, or other types of loans. You can use the money to purchase a new car, boat, go on a vacation. Many people use the money to do home remodels…adding on to the existing house, upgrading the kitchen, put in a pool. All these things are very helpful, and it’s up to you to decide what to do with your money.

How do you get a second mortgage? You get a second mortgage first by owning a house. If you don’t own a house, you won’t be able to get a second mortgage. If you have equity in your house, i.e. your house is worth more than you own on your first mortgage. You can get a second mortgage. In many cases you can get a second mortgage up to the value of the house. The best thing to do when getting a second mortgage is to get quotes. Quotes offer you the ability to “window shop” various rates. With a better rate, you will save more money on your second mortgage. Many quotes are good faith estimates and don’t require a credit check. If you like what a lender is offering in terms of rate and packages, you can choose to go with a lender at which time they will run your credit and tailor the loan package specifically for you.

Where can I get a rate quote? There are lots of places to get a rate quote. Local banks, lending companies, even online there are tons of sites that offer rate quotes. Although be warned…some sites out there will sell your information…so be sure to read the privacy policy before you fill in your information. One great place to get information on quotes and second mortgages is www mortgage refinance second.com. They offer some good advice and even offer rate quotes. But by shopping around for rate quotes, you will greatly magnify the possibility of getting a great deal and it will save you tons of money.

Tim Smith
http://www.articlesbase.com/finance-articles/what-is-a-second-mortgage-and-how-can-i-profit-from-it-76955.html

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Expand the description and view the text of the steps for this how-to video.

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If you have large expenses coming up, a second mortgage may be a viable option. Here’s how to apply for one.

To complete this How-To you will need:

A home appraisal
A computer with internet access
A credit report
Your gross monthly income
Mortgage lenders

Step 1: Get an appraisal

Contact a real estate broker for an appraisal of your home, or search online for “home appraisal” for a free estimate.

Step 2: Use credit score to determine interest rate

Request a copy of your credit report from annualcreditreport.com.You are eligible for one free credit report per year. Visit a lender to receive your credit score, and to estimate how much interest you will be paying for your second mortgage. Expect lenders to offer lower interest rates if you have a high credit score.

Tip: Check your credit report carefully, and dispute any errors in writing to the credit reporting agency.

Step 3: Know your future plans

Know your future plans. Be aware of market downturns when you plan to sell your home, or you risk losing equity if the housing market drops and are forced to sell at a loss.

Step 4: Assess your situation

Determine if you can afford a second mortgage payment. Remember the rule of thumb that housing costs should not exceed 28 percent of your gross monthly income.

Step 5: Choose a mortgage loan plan

Decide if you want a home equity loan or a home equity line of credit (HELOC). Choose a home equity loan if you need a set amount of funds in a lump sum, or HELOC when you need access to funds over a period of time when needed.

Step 6: Search for the best deal

Consult with several mortgage lenders to find out the down payment amount and costs of the loan. Shop, compare and negotiate the prices to get the best deal and save money.

Step 7: Choose your mortgage payment rate

Determine whether a fixed rate or adjustable rate mortgage is right for you. Consider a fixed rate mortgage if you intend to keep your house for a long time and want to pay the same interest and monthly payments throughout your loan term. Choose an adjustable rate mortgage if you plan to sell your home within a short amount of time.

Step 8: Seek professional advice

Get free professional advice through the U.S. Dept. of Housing and Urban Development at HUD.gov for any other questions or concerns before signing a mortgage.

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It’s easy today to apply for second mortgages. Using the internet, mortgage brokers and other resources, you can easily get a few quotes to compare in a relatively short period of time. Although its easy, its still a good idea to make sure you get the best second mortgages possible for you, though.

Here are a six tips for finding the best second mortgages.

1. Watch out for adjustable second mortgages rates and find out how they work. It could cost your thousands if you don’t do so.

2. Don’t be tempted to exaggerate your income to secure second mortgages. Work out your budget and stick to it. Remember your house is often collateral for second mortgages and you could end up loosing it if you can’t repay the second mortgages loan.

3. To get the best second mortgages its also a good idea to make sure you have the best possible credit rating. A good rating could get you better rates which could benefit you in the long run. Use a reputable credit company to get a copy of your free credit scores and then use their services to improve your credit rating.

4. Always read the second mortgages loan documentation before you sign for the loan. If you don’t understand something then ask. A misunderstanding could cost you thousands.

5. Don’t sign blank documents – not for a loan for anything else for that matter – would you sign a blank cheque?

6. Avoid brokers who:
• Make promises they don’t keep
• Pressure you into signing for a mortgage
• Offer deals that are too good to be true – they probably have a catch
• Loan clauses which include arbitration

Brigitta Schwulst
http://www.articlesbase.com/mortgage-articles/six-tips-for-find-the-best-second-mortgages-698152.html

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