Tips on Applying for a Second Mortgage

One of the main reasons that anyone would need to get a second mortgage or home equity loan is because they need money to consolidate debt, or to pay for unexpected large expenses or for home improvements.

This article focuses on some of the steps that you will want to take to make your second mortgage as hassle-free as possible. If you want to learn about your credit score before you apply for the second mortgage you can visit accreditloan.com for an accurate analysis of your credit score so that feel fully prepared as you apply for the mortgage. There you will also learn about other options that you can consider for personal and home loans. 

The first thing you are going to want to do before you start seriously considering the second mortgage is that you are going to want to make sure that you have exhausted all other avenues of financing. Depending on the amount you need, you might be able to get a better loan from someone and less of an interest rate on top of that.

Typically, all lenders want to know what you need that second mortgage. Making sure you have a valid answer, will make it easier in the process of determining whether or not to give you the loan.

Definitely do your own credit check and check for errors as well as checking your credit score. Lenders typically always do a review of your credit score to determine what the specifics of the loan will entail such as the financing rates. The higher the score, the better interest rate you will be offered if you are approved.

You can also take the time to do some comparison shopping for the different types of equity loans that might be available to you. You can discuss these loan options with the lender and together you can find the best loan that will suit your situation.

When you are ready to go in and fill out all of the necessary paperwork for your request, there are things that are necessary for you to provide to the lender in order to get you approved for the loan and to close the loan. This is the list of things most lenders require:

1.) Copy of your deed.

2.) The most recent tax appraisal.

3.) The last 2 years of your W-2 forms and the last 3 months’ worth of pay stubs. Make sure that you include any additional tax forms or schedules that you had to use when you filed.

4.) Proof of any of the other financial resources you might have such as child support, alimony, royalties, stocks, etc.

5.) Copies of your last 5 bank statements.

6.) A list of all lines of open credit with the account information for each, such as the account number, the current balance, and the payment amounts.

7.) Your most current mortgage statement.

8.) Your homeowners’ insurance information, specifically who you have coverage through and their contact information.

If you could fax all of the documentation prior to your arrival, this will go much quicker making the process more hassle-free.

Make sure that when you have completed the loan application, check and re-check to make sure you missed nothing and the papers are completed to the best of your ability. Missing information will only delay the process that much further, and it will make you and the lender frustrated in the process.

You should also be very wary of a lender that encourages you to practice falsifying information, seems to be too pushy, wants you to borrow more money than you really need, tries to get you into a financial agreement that is completely unrealistic for your situation, shows up at the signing of the papers with different information than what you agreed upon originally or someone who denies you copies of every aspect of the loan that you agreed upon.

If you have ever been rejected by a lender, chances are you will eventually receive a letter in the mail as a courtesy to you, explaining why you were denied the loan. If not, you can request the reasons from the lender as to why the loan was denied so that you can maybe fix the issue before you try to go and apply for another loan. Sometimes, if you have multiple open lines of credit, it can lower your score just enough for you to not qualify for the loan, so common sense will tell you that maybe getting more paid off on those credit cards will increase your credit score just enough for you to get that loan.

Julia

Julia

Julia Arostegi lives in California USA. She took Developmental Communication at the University of California and finished her studies in 2012. She is currently the managing director of California Magazine. She is also a blogger, content enthusiast and a photographer.