2nd Mortgage And Any Suggestions On How To Find The Best 2nd Mortgage.
Q: I bought my first house (Southern California) in January 98. I have excellent credit and have been swamped with 2nd mortgage offers (and mortgage spam). I like the idea of paying off high interest credit cards with money whose interest will be tax deductible. I've cautiously responded to a few of the offers. I responded to Providian and they have been extremely agressive in their calls. The terms of their loan seem high - 15 year, 13% interest, 4 points, variable rate capped at 19%(!)on a loan of $40K. I'd appreciate any thoughts on what would be the terms of a "good" 2nd mortgage and any suggestions on how to find the best 2nd.
A: If you want the interest on the loan to be tax deductible, then you can't take out one of those "125%" loans or anything that will exceed the equity in your house. Given that, all you need to do is find a reputable local mortgage broker or as a last resort a bank, and arrange for a home equity loan AKA 2nd mortgage. You will get far better rates than what these damn sharks offer, though exactly what rate will depend on many things, though with a good credit rating, you ought to be able to get under 10% at the very worst. We bought a house in February 98, and have been similarly swamped with these offers. Reading the fine print always reveals extremely bad terms, but so many people care only about what their monthly payment will be, not how long they'll be paying it off. I have a hard time imagining