A lot of people think that because their credit scores are lower than what the average lender says is satisfactory, then they cannot get a loan. Many of these people actually need bad credit mortgage refinance in order to get their financial lives back in order. Sometimes they do not realize that their repayment history is not the only thing a lender considers when they lend you money.
Your personal credit score is a consideration when you ask to borrow money, but it is not the only thing that is considered. One of the other factors that affects the outcome of a loan decision is whether or not the amount of money is secured by tangible property, or if it is an unsecured loan.
An unsecured loan is more difficult to get. For the simple reason that should you decide to default on the loan agreement then the lender would more than likely lose the investment they had made in you. A secured loan gives the lender the confidence of knowing if you default on the loan they can sell the collateral you put up, and they will not lose money on their agreement with you.
A second mortgage is a secured type of loan. You are using the equity you have in your home as collateral against the amount of money you are wishing to borrow. If you were to default on the agreement then you would lose all the equity you have built up over the years. Not to mention there will be a lien placed against your home when you make the loan.
If you do not pay the amount you owe, the lender can stop you from selling the property or from receiving another sum of money against it, until you repay them. If one lender denies you the money you wish to borrow, you need to continue to shop around until you find an agreeable lender.
Your personal credit score is a consideration when you ask to borrow money, but it is not the only thing that is considered. One of the other factors that affects the outcome of a loan decision is whether or not the amount of money is secured by tangible property, or if it is an unsecured loan.
An unsecured loan is more difficult to get. For the simple reason that should you decide to default on the loan agreement then the lender would more than likely lose the investment they had made in you. A secured loan gives the lender the confidence of knowing if you default on the loan they can sell the collateral you put up, and they will not lose money on their agreement with you.
A second mortgage is a secured type of loan. You are using the equity you have in your home as collateral against the amount of money you are wishing to borrow. If you were to default on the agreement then you would lose all the equity you have built up over the years. Not to mention there will be a lien placed against your home when you make the loan.
If you do not pay the amount you owe, the lender can stop you from selling the property or from receiving another sum of money against it, until you repay them. If one lender denies you the money you wish to borrow, you need to continue to shop around until you find an agreeable lender.