Private Second Mortgage And Credit Repair
“An Effective Way To Quickly Improve Your Personal Credit Is With A Private Second Mortgage”
A private second mortgage is one technique that you can consider to improve your credit score provided that you have available equity in your home to support an additional mortgage.
There are a number of reasons why this can be a good option for people looking to perform a credit repair quickly.
First of all, the fastest form of credit repair where your credit score will increase significantly within a couple of months is through the paying down of outstanding revolving credit.
When you have a high utilization of credit where you are at or near the limit of your credit cards and lines of credit, your credit score is reduced to reflect a higher credit risk position.
And because a lower credit score will not likely allow you to refinance your first mortgage at a better rate, the next best option is to get a private second mortgage and use the funds to pay down the credit card and lines of credit balances.
The key is to pay down and not to close these accounts as closed accounts will further reduce the available credit which is not likely to help your credit score.
Once the balances are paid off or down, the credit score will rebound as soon as the next credit reporting cycle completes which will likely be in 30 to 45 days.
The private second mortgage itself will not show up on the credit report as private lenders do not provide borrower data to the credit reporting agencies.
Once the credit score bounces back, you may then be in a position to refinance your first mortgage to pay out the private second without having to settle for higher interest rates.
This strategy can be very effective provided that you have significant credit balances to pay down to create the opportunity for your credit score to go back up, and equity in your property to support incremental mortgage financing.
The best way to assess this strategy is to work with an experienced private mortgage broker that places private 2nd mortgages.
For more information on this approach, I suggest that you give me a call and we’ll go over your situation together and discuss potential private second mortgage options available to you.