How Getting a Second Mortgage Could Lower Your Monthly Payments
Ignorant of your financial situation
Ignorance is certainly not bliss when getting a second mortgage – borrowers need to be clued up and need to know exactly what they have, and more importantly what they don’t. If you don’t want to be a borrowing dunce, take time to go through all your bank statements, organise your monthly bills and make sure you have a list of all your direct debits. This process will help you feel in more control when it comes to taking on the second mortgage – and you may even be surprised with the results. Many UK homeowners are oblivious to some outgoings and some charges that they blindly pay every month. Getting a second mortgage could save you some money before you even apply for it.
No plans for the proceeds of the second mortgage
When getting a second mortgage, you need a plan. This is a big responsibility and no light decision. This choice could be the financial lifeline you need, helping you out of a bind or going towards a great investment – but without a full plan for the money, it could be spent before you know it.
Oblivious to credit ratings
Your credit rating is a borrower’s most important asset – it’s what defines a lender’s decision and it’s what defines you as a borrower. If you are getting a second mortgage, be always mindful of your rating. A bad rating may limit what you can borrow, and may mean searching for a specialist lender. Similarly, a good rating may allow you to dream a little more and push the envelope out. Go to one of the UK’s credit agency websites and sign up today – your credit history is crucial when getting a 2nd mortgage.
Borrowing from dodgy lenders
The second mortgage market is massively lucrative. Unfortunately, that means it attracts those who think they can take advantage of ignorant people getting a second mortgage – go to a broker before you decide on a lender, they know who’s hot and who’s not. A lender may promise you the world and may offer unbelievable rates, but until you have done some research and consulted someone who knows the industry inside-out, take it all with a pinch of salt -a second mortgage deal is only as good as the lender who offers the loan.
No payback plans
Getting a second mortgage may alleviate financial woes, but nevertheless it’s still a loan and still must be paid back. Look at your income and outgoings, make a sensible estimation on future monies and make sure you do your maths – if you are not sure you can afford the loan, don’t. Getting a second mortgage may be the best financial decision you ever make, but without foresight and sensible planning it could easily be your worst.