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Will getting a 2nd mortgage on your first house put you in debt ?

 
 
Reply Sun 25 May, 2014 06:48 am
Some people zay a 2nd norther will put you in debt. Others say it shows you have good credit.
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Type: Question • Score: 0 • Views: 998 • Replies: 11
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jespah
 
  1  
Reply Sun 25 May, 2014 07:26 am
@lisa1471,
It's highly likely that it will put you into debt; you're already there. What a lot of people who take on additional debt fail to remember is that their house of cards can come tumbling down at any time, due to a catastrophic illness or being laid off or a divorce, among other reasons. You don't really have good credit; you have some trust from a bank to amass even more debt. But if you fail to pay off the loans, the bank will have no qualms against foreclosing on you.

And, I might add, you'll get a ton more credit card offers. Why? It's not because the companies think you're such a great risk. It's because they think you're a decent risk for a few months, and then they'll pass anything uncollected off to a collection agency.

Second mortgages are (usually - there are exceptions, but this shouldn't be to finance an Aruba vacation or a third automobile) for suckers.
lisa1471
 
  1  
Reply Sun 25 May, 2014 08:14 am
@jespah,
Is it easier to loose your house though? I thought that was a good thing.yes car guilty month after buying house got brand new car
glitterbag
 
  2  
Reply Sun 25 May, 2014 09:25 am
@lisa1471,
Yes, that makes it possible to lose your house and a ton of other credit problems. You might be better off refinancing your 1st mortgage if you can find a lower interest rate. I do understand the desire for bright and neat new things, but remember that the salesman who try's to convince you, you can easily afford it, he/she is working for the commission. They don't have a vested interest in your financial well-being, you need to discipline yourself not to believe you need everything that appeals to you. Large debt can be soul crushing. I have family members who have gotten into serious financial trouble. And life doesn't give you a guarantee you will always be healthy enough to work. It's never smart to spend money you haven't earned yet.
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bobsal u1553115
 
  1  
Reply Sun 25 May, 2014 09:39 am
@lisa1471,
You're in debt until you pay the mortgages.
glitterbag
 
  1  
Reply Sun 25 May, 2014 09:48 am
@bobsal u1553115,
bobsal u1553115 wrote:

You're in debt until you pay the mortgages.


And for the new car
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lisa1471
 
  1  
Reply Sun 25 May, 2014 09:58 am
@bobsal u1553115,
Ok thank you for educating me I had no idea
glitterbag
 
  1  
Reply Sun 25 May, 2014 10:27 am
@lisa1471,
You really need to talk to someone who has solid advice. It's great to have good credit, but each time you sign up for a new credit card or new line of credit, it affects your credit score. In other words, it's possible to have access to huge sums of money, by virtue of the credit card approval, you can't get approved for a loan at a good interest rate. Some credit cards grant you pre approval for huge amounts of money, even if you don't ever say spend up to the $30,000 max, if you have 15 cards with a high max, usually accompanied by over-the-top interest charges, you might have access to hundreds of thousands of dollars. Most banks are reluctant to give you more credit than you can handle. If you can join a credit union, I'd urge you join. They tend to avoid risky investments, and this means lower interest rates for you.
lisa1471
 
  1  
Reply Sun 25 May, 2014 07:39 pm
@glitterbag,
Ok will look into that but people do apply for 2nd loan while buying a hpuse too.
roger
 
  1  
Reply Sun 25 May, 2014 07:43 pm
@lisa1471,
Sure they do, lisa, but it's more a speculative gamble than an investment.
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glitterbag
 
  2  
Reply Sun 25 May, 2014 08:31 pm
@lisa1471,
lisa1471 wrote:

Ok will look into that but people do apply for 2nd loan while buying a hpuse too.


Yes they do. My sister-in-law told me that she and my brother refinanced their new house after being in it for about a year. I said, oh that's great, it pays to get a better interest rate, and she said yes, they also received a credit line of $25,000. I said great, you never know when you might need it. Could be a heat pump or something else could go wrong, and then you have a source to pay for it. To which she replied, oh, I've already spent the 25,000. That shocked me, and I blurted out, On What?????. She replied, i paid off the credit cards, and i asked (again in shock) what did you buy that cost 25,ooo And she said well I had to furnish the house. And once again I was appalled, she bought e everything on credit and couldn't

Well that's what she did, they wound up taking money out of his 410 and eventually going into chapter 11. She doesn't work, she really only worked possibly 8 years, and she's about 54. They are dead broke. They have no wiggle room, they spent the money from my parents estate in three months. The entire amount. The estate was settled in 1999, I invested, my brother went into deep debt. My house has been paid for at least since 2003/2004 possibly earlier. That's $2,000 a month I can use amy way I wish. So I can pay cash for cars, or cash for home repairs or remodeling, so in my retirement years I can relax.

Yes, many people max out their credit cards, buy houses they can't afford and cannot maintain, and buy cars with money they don't have. If you think money is only important when you're young, wake the hell up and plan.

But, good luck, I gave you my best advice and I shared a horror story. Hopefully you will not assume you are too cool for school. So, since I'm not responsible for feeding or housing you, take your best guess. My situation should remain stable, I hope your situation fits you well.
lisa1471
 
  1  
Reply Mon 26 May, 2014 04:53 am
@glitterbag,
No.that helped thnx.thats scary insteady of saving $25'000om emergency they shopped.yeah thats crazy .I would wamt to.use for heater extermination,repairs only.guess that being available looked good to.them.
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