How To Avoid Defaulting On Your Second Mortgage

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How To Avoid Defaulting On Your Second Mortgage
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• As a short-term interest-only loan taken out with
  the available equity in your property, a second
  mortgage is typically only offered by private
  lenders, and unfortunately, their rates are
  higher than those youd see for first mortgages
  at a bank. Default on your second mortgage, and
  you could experience foreclosure of your home, or
  even face a lawsuit the consequences can be
  devastating, but seeking help from a reputable,
  local broker can help you negotiate a settlement.
• Paying your second mortgage is the only way to
  avoid defaulting on it, but realistically, this
  is never easy, and many people end up defaulting
  through no fault of their own. So, if you do end
  up defaulting, what could happen and what can you
  do to minimize the damage?

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• Foreclosure dependent on your homes equity
• If the value of your home is greater than the
  amount left to pay on your mortgage, then you
  have equity, and the more you have, the greater
  the possibility that the lender of your second
  mortgage will try to foreclose your home should
  you default.
• If your home is underwater, you could be spared
• If the amount left to pay on your mortgage is
  less than your homes value, your home is classed
  as underwater, and your second mortgage lender is
  typically less likely to foreclose your home in
  the event that you default.

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• Negotiate a settlement
• This is made much easier if you have a
  professional broker on your side, and they can
  help you avoid the power sale of your home, or
  even being sued personally if the proceeds from
  the sale arent enough to cover the loan cost.
• What happens to your first mortgage if you
  default?
• Your second mortgage lender can still foreclose
  your home if you default, even if youre
  continuing to make payments on your first
  mortgage. If your home is sold under power of
  sale, the profits will go to each lender in order
  of priority.

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• Could you be at risk of a lawsuit?
• Irrespective of whether your second mortgage
  lender opts to foreclose your home or initiate a
  power of sale on the property, you could still be
  at risk of a lawsuit. This makes it even more
  important to consult with a professional mortgage
  broker to try and negotiate a settlement.
• What about paying off some of the debt?
• Some lenders may be willing to accept a lump sum
  payment thats worth less than the amount you owe
  them, or even forgive some of the added penalty
  and fees that accumulate while defaulting, but it
  will depend upon how much you have left to pay on
  your mortgage.

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• Listing your home for a short sale
• A short sale is when your home is listed for less
  than the amount left to pay on your mortgage and
  doing this can help you recover some of the
  leftover debt that you owe lenders.
• The importance of working with a mortgage broker
• If you work closely with a local mortgage broker,
  you can negotiate a better deal if you default on
  your second mortgage and avoid some of the
  damaging consequences.

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• If youd like more advice about whether a second
  mortgage is a smart idea, or need help with a
  recent second mortgage default, reach out to a
  local mortgage broker at the earliest
  opportunity.
• Mortgage-broker-Calgary is your best resource for
  finding a mortgage for your property. Luke Wile,
  is the best Calgary mortgage broker and is proud
  to serve clients from across Canada, while being
  centered in Calgary, Alberta. Luke is proud to
  serve his clients with a personalized approach to
  finding his clients the best and lowest Canadian
  interest rates and terms offered by the major
  banks and private lending institutions. If you
  are looking for a mortgage broker in Calgary,
  with Luke Wile you can get fast and personal
  expertise for your mortgage!