What exactly is a 125% 2nd Mortgage?

A 125% 2nd mortgage is an excellent way to reduce your overall monthly payments substantially. In some cases by 50% or more.125% 2nd mortgages allow you to borrow 25% above the appraised value of your home. In other words if you have a home worth $100,000 and your first mortgage on that property is $95,000 you could possibly borrow an additional $30,000.
(100,000 x 125% = $125,000-$95,000 = $30,000 in simple terms) for debt consolidation, student loan, automobile etc. Also after paying all or some of your debt you could walk away with cash-in-pocket for a rainy day! There are limits of course. The maximum total loan amount for a 125% 2nd mortgage is $100,000 and the maximum cash-in pocket can range from $5,000-$30,000 or more depending on credit scores. (subject to change)

Remember this mortgage product is credit score driven, so if you have less than a 620 score, you may not qualify.

But you may qualify for 100% financing which is another article I will write about, in the near future, so bookmark this site!

What Credit Scores Are Needed to Qualify?

It is important to note that there are three repositories that we pull credit reports from –Trans Union, TRW, and Equifax. Please understand that we will average or use the middle score when qualifying for this program. Some clients will boost a great credit score. Unbeknownst to them, the customer gives us their highest score. But after averaging the three scores, or evaluating their middle score, the customer ends up not qualifying because the credit score is, in fact, too low. So please prepare yourself for this obstacle when considering this program.

Ok, So How Can You Save Me Money Or At Least offer some needed debt relief?

Here is a sample list of an average homeowners reoccurring monthly debt:

Borrowers Minimum Monthly Payment ............Current Balance

Master card $150.00 ............................................$5,000.00
Visa $90.00 ............................................................$3,000.00
Sears $75.00 .........................................................$2,500.00
Auto loan $322.00 .................................................$10,000.00

Totals $637.00 .......................................................$20,500.00

$20,500@12% over 25 years = $215.91

$637.00 Current Total Monthly Payment
-$215.91 New 2nd mortgage mortgage payment
Savings $421.09 Per month!

In the example above we have paid off all debt owed and reduced the monthly payments by 66%= $421.09 per month savings. That is serious debt relief! Just remember, your credit cards will now be paid off so be careful not to charge them back up again. Or better yet cut them up and call the creditors to close the accounts. (Tip!) Too many unused open accounts will calculate a lower credit score.

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