Second Mortgage improves credit score

How Can a Second Mortgage Improve Your Credit Score?

When you think about ways to improve your credit score, getting a second mortgage might not be the first thought that comes to your mind, but did you know there are ways that a second mortgage can actually help you with your credit?
It’s true. Whenever you get new credit and are consistent with making your payments, it helps to improve your score. But if you credit card debt becomes too much then it might become difficult to keep up with the payments, which can harm your credit score. This is where a second mortgage can help you can get out debt faster and help improve your credit score.
If you have high-interest debt such as credit cards or payday loans, it can feel like it is almost impossible to pay off. Second mortgages however are typically much lower interest than credit cards or payday loans, which can help you with consolidating your high interest debt. A second mortgage can help you dramatically lower your interest on your outstanding debts and free up cash flow – meaning that if you continue to make the same debt payments each month and a lower amount.
Again as you stay consistent with the payments on your second mortgage and you lower your amount of total debt, you will see your credit score begin to improve.
How can I get a second mortgage when my credit is poor?
One of the great things about second mortgages is that you don’t need to have perfect credit in order to get one. In fact, you don’t even need to have good credit. The only real criteria for getting a second mortgage is that you have sufficient equity in your home. This makes it an excellent tool for improving your credit.
Are there any drawbacks to getting a second mortgage?
When you get a second mortgage, you are getting a loan and using your home as collateral. This means that if you do not make your payments, you are putting your home at risk. It is therefore very important that if you decide to use a second mortgage to help you get out of debt that you remain committed to the process and that you do not go back and rack up even more consumer debt.
It is always recommended that if you do get a second mortgage, you sit down with a professional mortgage broker who can help you decide whether it is the right solution for you.
Contact us today.
If you would like more information on getting a second mortgage, contact Rumy Gill – Brampton Mortgage Broker today!

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