Second Mortgages Not So Popular
 
There for a while any one that had any kind of debt problem turned to their home as a way of getting rid of their debt. They knew that if they had equity in their home that they would be able to use a home equity loan as a debt consolidation loan and get rid of their debt. They knew that the terms for this kind of a debt consolidation were better than the terms for regular personal loans or debt consolidations that they would get from their banks. They knew that the interest rate would be lower and that they would pay less over the life of the debt consolidation loan.
 
But that was when the housing market was booming and house sales were through the roof. Residents saw their housing prices go way up and they saw the amount of equity in their homes increase and they decided to use it for everything from finally adding in a swimming pool to paying off their credit cards. Then the bottom fell out of the housing market and most of these people who used their homes as a debt consolidation found themselves upside down in their homes. Now they owed more on them than they were worth, and they knew that they had made a mistake.
 
So instead of turning to their homes as a debt consolidation, they turned to their banks. The number of regular debt consolidation loans increased and the number of second mortgages decreased.

 




 

 

Back to News Updates