Second mortgage refinancing has become one of the most attractive concepts in the mortgage industry. Many homeowners at one point or another have either considered or obtained this type of loan for many different reasons. Justifications may be different; such as home improvements, consolidating compounding credit card debts, going on a long awaited mortgage refinancing deserved vacation, or simply investing in a child's future and education. The idea is always the same...money talks!
People with money spend their money. People who don't have money but like to live like the ones who do are the ones who go after this type of loan. A second mortgage loan is taken against the property's equity which is the difference between the preexisting mortgage on the home and its current market value. However, what needs to be understood by homeowners and potential borrowers is equity is not a savings account that they have worked for and earned. Rather, it's inconsistent, unreliable and if misused has a negative consequence on the property and their lifestyle. Just like fire, enough of it will refinancing mortgage you up, too much of it will burn you.
I have knowledge in every type of mortgage, and taught each of their consequences if abused. However I believe that many people should consider the advice of an objective financial adviser before they commit themselves to a second mortgage loan or any loan for that matter. I find it ironic that many do not consider financial counseling when the stakes are so high. Purchasing or refinancing a house is the biggest financial investment for the majority of people, financial counseling should be mandatory.
The home owner's appetite to spend the easy money they never worked for cannot be condemned. We have an impartial system of checks and balances in the mortgage industry. The idea that in the event of a foreclosure or short sell, the first mortgage is protected and the bank has the priority is not right at all. The second mortgage loan along with the homeowner is abandoned. Innovative financial solutions aligned with the public ability during it darkest hour is yet to be seen.
To start we must bring the two concepts of home and house together. While the banks are in the business of providing loans to people to purchase or refinance a house, people are more concerned just to have a place called home. Where the house is nothing but an empty lot with certain materials and fixtures, a home is where life happens. People have the highest level of attachment to their homes. Many have a hard time letting go of their past homes, even when purchasing a new and even better house. Home means memories; it means families, pets and some place to call home. That is why it is so imperative for the banking industry to recognize this, and realize the importance of creating a reliable procedure independent from the markets uncertainties, not only for the public peace of mind, but for theirs as well. For the public it is important to realize the responsibility of home ownership and not jeopardize their home to the inadequacies of impartial system.
You can also find more information about Second Mortgage Refinancing and learn to stay one step ahead of the banking industry.
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