Leverage is the most important concept to understand when trying to eliminate a 2nd mortgage that is past due. If the value of a home has dropped below what is owed, the 2nd mortgage has lost the leverage to foreclose on the property. The 1st mortgage will always be paid in full before the 2nd mortgage gets even a dime of what is owed to them. Most 2nd mortgages will charge off when they go six months past due on payments because they simply have no leverage anymore to enforce the debt. Once charged off the debt will be sold off and written off the lenders books as bad debt.

If you owe more than your home is worth and part of that debt is a 2nd mortgage or equity line, you may be able to save thousands of dollars and wipe out the 2nd mortgage right away. Here are 3 ways to get it done:

Settle In Full If you’re looking to quickly wipe out a 2nd mortgage a settlement in full will be the fastest option, it will also save you the most money. You will want to plan on a settlement between 20% – 30% and will need to have the cash on hand in order to take advantage of great offers quickly. Typically in order to receive settlement offers this low the payment will need to be made in one lump sum.

Term Settlement Term settlements are becoming more and more popular as a way to wipe out a 2nd mortgage. This shares the same major advantage of a settlement in full, the final amount paid will be an agreed upon amount lower than the current balance owed. The difference will be that the settlement offers will typically come in higher at the 40% – 60% range. This lower amount will be spread out evenly over 6-24 months depending on how long you can negotiate to stretch it out.

Loan Modification If the value of a home has not fallen enough to leave the 2nd mortgage unprotected, it may not be possible to reach an acceptable settlement arrangement. It doesn’t mean there won’t be any options, in fact a traditional modification may offer incredible plans to get the loan current and the payments reduced. Recently the government also introduced a program similar to Making Home Affordable that is exclusively for 2nd mortgages. Not all lenders are on board with it yet, but it sounds like its right around the corner.

With all of these options you will need to provide standard documents to outline what your financial situation is and what you propose as a solution. A recent appraisal of the property to show the true current value of the home will help and is great ammunition when negotiating a settlement with the lender.

Always remember that if you have the leverage, use it, make a reasonable offer and stick to it.

–
About the Author:
The author has been on the front lines of the “economic crisis” since the beginning and continues to fight for consumers nationwide. We’re experts in negotiation, specifically debt negotiation. We know the credit and collections industry very well, its policies, procedures, and all federal and local laws that apply.
 
Northeast Settlement Group Inc866-794-1869 Toll Free
 
Shocking Examples of People Saving Money 
Article Source

A bit of humor...


Powered By WPHumor

Famous Quotes..


Powered By Famous Quotes

Please Note... All links within articles are placed by their author-owners and not by this blog.Products with in those links may or may not be the best in the world.If it sounds too good to be true it could be a scam.Articles are posted for their info,ideas and or entertainment value only.

Powered By WP Footer

1st And 2nd Mortgage Refinance Loan

Refinancing a first and second mortgage requires some extra considerations.
Depending on your equity, you may find that combining the two mortgages results
in a higher interest rate. You may also find that you have to carry PMI with the
refinanced mortgage.

Will Refinancing Benefit You?

Refinancing two mortgages allows you to consolidate your loans into one payment,
often lowering your monthly bill. You may also find lower rates under the right
circumstances.

Those with a large amount of equity benefit most from consolidating loans since
they qualify for the lowest rates. It is important to look at interest savings,
not just monthly numbers which can be misleading.

However, if you have less than 25% equity, you may end up qualifying for higher
rates. With less than 20% equity, you will also have to pay for private mortgage
insurance. Even with these factors, you may still find that you will save money
by refinancing.

Have You Done Your Research?

To see if refinancing makes sense for you, research mortgage lenders. You can
quickly go online and request quotes and terms. Look at the different offers,
and work out the numbers. An online mortgage calculator can help you figure out
monthly payments and interest costs.

An easy way to compare cost is to first add up your interest payments for both
mortgages. Use this number to compare interest payments with each potential
mortgage.

You also need to factor in the cost of refinancing. Just like with your original
mortgage, you will have to pay fees and points. You want to be sure that you can
recoup these costs with your interest savings.

Why Do You Want To Refinance Both Mortgages?

While refinancing both mortgages is convenient, you may decide to refinance only
one or both separately. With your main mortgage, you can expect to get low
rates.

A second mortgage will usually qualify for higher rates, but you can lock them
in. You may also choose to convert from a line of credit to an actual mortgage.
Again, you will want to investigate financial packages before signing up with a
lender.

View our recommended mortgage Refi lenders. Carrie Reeder is the owner of ABC
Loan Guide, an informational website about various types of loans.

A bit of humor...


Powered By WPHumor

Famous Quotes..


Powered By Famous Quotes

Please Note... All links within articles are placed by their author-owners and not by this blog.Products with in those links may or may not be the best in the world.If it sounds too good to be true it could be a scam.Articles are posted for their info,ideas and or entertainment value only.

Powered By WP Footer