Second Mortgages better off at you hometown bank
This entry was posted on 3/25/2007 8:22 PM and is filed under Products.
The next product to see backlash from the fallout of the mortgage industry is the familiar second mortgage loan. Typically many homeowners would get a second mortgage on a high loan to value loan where they wanted to avoid PMI and or were refinancing to pay off debts. Because these loans were typically adjustable or at a higher interest rate than a typical first mortgage. Second mortgage loans have carried a higher delinquency than first mortgage loans.
Currently if you are in the market for a HELOC or fixed rate second mortgage you have some options however limited they may be. For the most part if your credit score is not 680 or higher you are probably going to get a loan. You might find one or 4 companies left that are being competitive under a 680 credit score however I would say your time is limited in getting these loans.
Since the middle of the 1st quarter we have seen many lenders trim back that product line to the brink of extinction. I would venture to say that many lenders will move to a more traditional one loan program avoid a second lien on your home.
How does this affect homeowners- Well you still have your local banks equity line that you can count on for a quick cash influx if you are in the market for a second mortgage, the other option is that you will find banks forcing you to either refi your existing first mortgage or stand pat with your current loan.
If you are in the market for a second mortgage for either consolidating debt or taking some cash out you might look down to your corner bank first before you consider a mortgage broker. As I stated earlier I am in this business to do loans but at the same time I want to be smart about it for the consumer. If you currently bank somewhere they will typically waive the closing costs as long as you keep their loan for 3 years and you typically pay little or no costs. I have had 2 second mortgages and both I got from my local bank and I am in the business.
