Two Easy Ways to Overcome Bad Loans
Missed out on some of the credit card payments and now looking for ways to pay it back and bring your credit score back to normal? Most people might not have the liquidity to pay it back in one go. This is when you should take advice from experienced and insightful financial advisers like Nord Est prêt hypothécaire mauvais. They can guide you to become financially successful again.
There are a number of ways in which your bad loan can be overcome –
- Bad credit mortgage
- Second mortgage
What is a bad credit mortgage?
A bad credit mortgage is just like a normal mortgage except that it is issued to people with bad credit scores. This might seem like an anomaly, but this practice is very common. You can avail of a bad credit mortgage before declaring a consumer proposal or bankruptcy. This is just another method of refinancing which can be used to settle your credit balances, smaller loans, or any other mortgage.
Why is a bad mortgage loan used?
A bad mortgage loan, even though, attracts a higher interest rate, can be beneficial to your financial position in the long run. This is because you can use your bad mortgage loan to consolidate your other loans and save on paying individual interest.
For example, if you have three loans from other sources and credit bills to settle, then you can use the extra amount from the bad mortgage loan to settle all these loans and then pay only for the refinanced loan.
The average interest of all the individual loans will almost always be higher than the interest on your refinanced mortgage. Also, the time period of repayment will be longer than normal loans.
In the long run, combining your bad credit mortgage with assistance from expert mortgage brokers like North East mortgage agency can help you win the financial race.
What is a second loan?
A second loan is similar to a bad credit mortgage except that this loan should be acquired from another private party. Only if you have an equity of more than 25-30% on your house or property, a second loan will be allowed by private lenders. But this loan can be availed for almost all of your equity, unlike traditional bank loans.
Second loans have very high-interest rates but the repayment period is also prolonged. Second loans can be a risky affair if not executed with the help of experienced mortgage brokers. This is because your private lender has only the aim of making money and not your financial security.
To conclude, to be on the safer side, always team up with an experienced mortgage broker while dealing with mortgage refinancing.