Credit & Debt

Do you own your home? If you do, you could be accepted for a secured home loan.

Got bad credit? That’s ok, most lenders will still over a loan for up to 85% of your home value for up to 35 years!

That sounds like good news, right? Well, what if the lender forced you to sell your home in order to recoup their money?

A homeowner loan means that the loan is secured against your home. So there is barely any risk for the lender, and you take on all the risk. Even if you don’t pay, the lender knows it can get their money back by taking control of the house and selling it. While it’s not an ideal situation for them, it’s better than giving unsecured loans which they would have little defense against if you stopped paying and filed bankruptcy.

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Second mortgages could really be tempting. If you need money and you already have an existing home loan, making a second loan using your home as a security could now be possible. Such loan products are getting more popular and more common. That is why many lenders and loan providers across Australia are offering such products.

There is nothing wrong about taking second mortgages. In reality, you could use the loan amount to make further investments or to add to your business capital. But there are still numerous pitfalls that you should avoid. There are numerous things you should always consider before and during filing of applications to take any of available second mortgages.

Interest rates

In general, second mortgages implement higher interest rates. This is logical because lenders are taking greater risks in providing such loans. If you would get into default on your loans, you are required to first settle your primary or first mortgage. Only after settling your first home loan would you be required to take care of the second.
Check the APR (annualised percentage rate) applied. It is advisable not to immediately apply for the second mortgage you find. There could be other second mortgages with lower APRs. As you perform a comparison before your decision, get quotes from several banks, credit unions, and dedicated mortgage lenders so you could logically find the best product there is for you.

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Quite fittingly, the newest book I’ve started – Generation Earn – mentioned Digerati Life under the “Job Juggling” chapter for Gia’s accomplishment in turning her part-time hobby into a full-time gig.

A well-known personal finance site that writes about smart money moves, Digerati Life’s offer to write a guest post was a much welcomed email. Enjoy the post!

Vision is defined as the ability to see. In another definition, vision is defined as foresight, or the ability to see beyond the obvious and beyond the circumstances. According to Dr. Myles Munroe, a motivational speaker, “vision is the source and hope of life.” And is “the greatest gift ever given to mankind.”

That sounds nice and maybe even a little over the top, granted that this is a description that’s offered by an evangelist (it’s his job to inspire, after all). But let’s look at the message here: what does vision have to do with gaining freedom from debt? Would vision be able to eliminate it? Well, you won’t be crediting vision for paying your bills. But thanks to this, you may be empowered to think clearly and to stay on track when pursuing your debt elimination efforts.

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