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125 percent Second Mortgage
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125 percent loan

The old adage which says that anything too good to be true usually is, may or may not be true, depending on how you work certain offers and product incentives to your advantage. For example, the second mortgage often delivers benefits that are overwhelmingly favorable without any hidden setbacks:

• Save money now to maintain financial control

• End Debt - Today

• Reduce monthly payments

The above promotions and instantaneous money fixes are considered part of the 125 percent loan or second mortgage. The loan product is name a second mortgage because it allows the homeowner or borrower to take out a second mortgage of up to 125 percent of the value of the existing residential property. American consumers, racked up in debt, are attracted or inspired by the loan because they see it as a way out of their monetary woos.

The central feature of the 125 percent loan include: an interest rate lower than what the average consumer pays in credit cards. Because so many credit cards carry interest rates of 15 percent or more, the loan can positively sidestep the homeowner to go in a new direction.

Moreover, since the second mortgage comes with a lower monthly payment, the American consumer is attracted to the possibility of amortizing their debt over a 15-to 30- year period rather than paying for it all within the next few years. Another enticing feature of the 125 percent loan is, that in comparison with a credit card, the principal payments of the 125 percent loan reduce overall monthly fees by a third or more by transferring or consolidating the debts into a second mortgage.

The 125 percent loan has another sparkling feature that borrowers often find irresistible. For the home loan consumer considering this type of financing, the best advantage is that a portion of the entire interest expense may be deducted from federal income taxes.

Now while the above features may represent an exceptional way to eradicate one debt load or schedule of monthly bill payments, a borrower should consider their future financial plans and living arrangements.

For example, a homeowner who is overwhelmed by debt and, though they plan to move or sell in the near future, the property value of their home has sizably appreciated, the 125 percent loan is an ideal solution. But for the person neck deep in debt and, while their home has not dramatically increased in value nor do they have an interest in relocation, a little more time should be put into considering all available financial options, as well as, the possibility of a employing a debt consolidation program.