Bad credit, mortgage second loans are not impossible to get, though you will need to be willing to jump through a few additional hoops and shop around a little more. In some ways the current economic downturn is a good thing. It has brought to light the fact that anyone can be affected by a job loss or illness. The sheer magnitude of what has been going on has forced banks to reconsider people with bad credit, most of the country has incurred at least a ding or two on their credit rating.
The best thing you can do to increase the likelihood that you’ll be approved is to take some time for proper preparation. If you’ve been making your first mortgage payments on time that will go a very long way. This is especially true if you are approaching your primary mortgage holder for a second mortgage. They will already know you and they will know more about the value of your property and your payment history, which will help if you’ve gotten past the rough spots and are making payments on time.
Don’t ever forget to look at this like a business transaction, that’s what it is. Ultimately the bank doesn’t care about you or your personal challenges or issues. All they care about is whether or not you’ll repay the loan. They want to make money by lending to you so you need to do anything you can to reassure them that you are a good risk.
If you can provide them with proof that you have good job security, that can help a lot. If you won’t have a job in a month or two they won’t be likely to extend credit to you and your chances of getting a bad credit, mortgage second loan are non existent.
If you can show them that you have been at your current job for a long time (assuming you don’t work in a field that has been affected by the economy) and they’ll be more likely to overlook some past credit issues. It’s also good to be able to provide valid reasons for why you fell behind on your payments in the first place. Show them that it was circumstances beyond your control and that are unlikely to ever happen again.
Make sure that before you even approach the bank you have taken all the fees and payments into consideration. Showing them that you are prepared and you have a firm handle on your money and budget will be another step in allowing them to trust you and think of you as a good risk.
Many people have suffered with the meltdown of the economy. It’s not at all uncommon to find people who once had great credit scores with a blemish or two on their record. The banks understand that and are a little more likely to lend to people who have a blemish or two. Just make sure that you can prove to them that you will pay your mortgage back, that you have a stable source of income and that you are a good candidate for bad credit, mortgage second loan.