Get a Second Mortgage With Bad Credit
Get a Second Mortgage With Poor Credit
Getting a second mortgage with poor credit can be very time consuming and is not the easiest thing to achieve. Second mortgages are much harder to get than first mortgages because they take the second lien position and take up more equity of the home. It is very hard to find 100% financing with poor credit.
Getting a second mortgage often requires either a lot of equity or a strong credit history. If you have a lot of equity stop wasting time with a second mortgage and just refinance because you will get a better rate and save more money by refinancing. If you dont have a lot of equity, but you have 15% or more of your homes value you can get a second mortgage by following the steps outlined below.
First, get a copy of your credit report and your FICO score. This is necessary. You need to know what the lenders are going to see and what you might be able to clean up before you try to get a loan.
Second, if you have any smaller debts, under $500, that you can payoff do so, especially if they are past due, judgments, or collections. This will help boost your credit score and will clean up your report a little bit.
Third, you need to send a letter asking for the companies that you pay off to remove the derogatory item from your report or at least show paid as agreed. This will help your credit in the short run and the long run.
Fourth, send a letter to the credit agency disputing every item on your credit report that is past due, a judgment or sent to collection. If any of these companies dont respond in time they will be removed from your credit report. This will also boost your credit score.
Fifth, you will want to catch up any items that are not paid as agreed and get your credit card balances as low as you can. I know this might be hard, but it will really help. If your credit card balances are under 25% of your limit the credit agencies look favorably on you and it will help your credit score.
After you have accomplished as much of these steps as you can get a new copy of your credit report and score. Your credit score should have gone up and now you can start shopping around for a second mortgage. Even 20 points can make a huge difference in whether or not you get a second mortgage.
