Second Mortgage Articles
If you are looking for a remortgage but you have a bad credit history this section of the site may well help. Here you will find links to our second mortgage articles which explain the facts you need to know before making any kind of decision about remortgaging your home.
Let’s start with the basic elements of a Second Mortgage
Second mortgages may appeal to people who are looking to recover from bad credit. Second mortgages offered by bad credit mortgage lenders may be called arrears mortgages, sub prime mortgages, bankruptcy mortgages or may be known by many other labels. Second mortgages are a great option if you have bad credit because they are a way to pay your debts and start again.
Many people have bad credit these days and need second mortgages to start their financial recovery. Consumer and credit card debt are high and changing work and family patterns have increased the need for second mortgages. Family breakdown can leave some people struggling financially. It is all too easy to find yourself unable to repay credit cards or pay utility bills and from there it’s a short step to being overwhelmed by debt. The same situation can arise when illness makes it impossible to pay bills, and second mortgages may be the only solution to the financial crisis.
Bad credit second mortgages are available from a wide range of lenders, with more lenders offering these second mortgages as consumer demand increases. The application process for these second mortgages is similar to that for standard mortgages, but there is one important difference. With second mortgages for bad credit, you don’t have to have a perfect credit history. CCJs, arrears, defaults, IVAs and bankruptcy are all allowed. However, it’s worth checking the criteria of the particular lender you are interested in as there are differences among them in terms of the fine print.
So why would people consider second mortgages if they have bad credit? Quite simply, it’s because the interest rates on second mortgages are usually much better than the rate on credit card debt, even from a bad credit lender. With credit cards, you might be paying over the odds for your debt, sometimes more than 20 per cent APR, while with second mortgages the rate will be much lower. This is because second mortgages are secured on your home. Whilst this means there is pressure to maintain the payments on second mortgages, it also means that you can use them for debt consolidation.
It is best to take professional advice if you are planning to use second mortgages in this way. You will need advice on debt consolidation as well as advice on the appropriate second mortgages. Most people who have owned a home for a while will find that it has increased in value, so why not use this increase to rid yourself of debt? That’s why second mortgages are so useful to many UK homeowners.