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    lisa1471's Avatar
    lisa1471 Posts: 181, Reputation: 1
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    #1

    May 25, 2014, 05:45 AM
    Ask me helpWhat do you think about 2nd mortgage while buying your first home?
    A lot of people often say it's great when your approved of a 2nd mortgage that your doing good.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    May 25, 2014, 05:49 AM
    I'm not sure I understand your question. An approval for a second mortgage would indicate that a) you have equity in your property and b) you have a good credit rating. But the need to take a second mortgage may indicate insufficient savings.
    lisa1471's Avatar
    lisa1471 Posts: 181, Reputation: 1
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    #3

    May 25, 2014, 05:57 AM
    Equity even if your bust buying it.What do you mean insufficient savings?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,304, Reputation: 7692
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    #4

    May 25, 2014, 07:13 AM
    A second mortgage when buying a home, means you do not have proper down payment and are borrowing money you should have saved to buy the home.

    it also means you may well be borrowing more money than you can properly repay, esp if something goes wrong with income.

    Second loans are the reason many people lose their homes, because of too high a debt.

    It does mean you have good credit, means that there is value in the home. To allow for the loan.

    being able to qualify for it, and actually getting the loans are two different issue.
    lisa1471's Avatar
    lisa1471 Posts: 181, Reputation: 1
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    #5

    May 25, 2014, 07:24 AM
    What if it is used to purchase a new car? I didn't realize how much debt it cause.is 2nd loan always from different company?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #6

    May 25, 2014, 10:17 AM
    Ok, I didn't see the buying the home issue. First, you can't get a 2nd mortgage until a first is processed. So its not going to happen at the same time. You may be able to get another loan depending on your credit but now you are getting into a risk category. If you don't have the money to pay the down payment you shouldn't buy. If the primary lender finds out you were borrowing to get the down payment, they may consider it fraud.

    I meant that if you have to borrow against your house, then you don't have enough savings.
    lisa1471's Avatar
    lisa1471 Posts: 181, Reputation: 1
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    #7

    May 25, 2014, 06:34 PM
    Ok.yeah when buying a house you can get a second loan I've seen it happen
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,304, Reputation: 7692
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    #8

    May 26, 2014, 04:35 AM
    You should never use a 2nd mortgage to buy a car. The car will be rust and not running and payments on the debt continue. You could start putting the payment into a savings account and when you have enough money, just buy the car. With cash.

    The best person is one with NO debt what so ever.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #9

    May 26, 2014, 06:26 AM
    Quote Originally Posted by lisa1471 View Post
    Ok.yeah when buying a house you can get a second loan I've seen it happen
    Where did you see this happening? A primary lender is not going to give you two loans. A secondary is not going to give a loan until the house is yours.
    lisa1471's Avatar
    lisa1471 Posts: 181, Reputation: 1
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    #10

    May 26, 2014, 08:12 AM
    Yes Ive seen during purchase taking out second one after for repairs
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #11

    May 26, 2014, 09:08 AM
    So then why did you ask? It depends on how much equity. If the lender feels the repairs will increase the equity, it might happen, but its not usual.

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