What Can You Do With a Second Mortgage?

What can you do with a second mortgage, what can you not dowith a second mortgage? There are somany options available for second mortgage money that we're going to take anentire article and examine some of those options. Home improvement, college education, businessventures, even a luxury vacation is an option for your second mortgage money.

Let's startwith the more intelligent options: home improvements and college educations. Home improvements are oftena necessity after several years of occupying your home; when you actually livein a home, everyday use of the home encourages wear and tear. Carpet, appliances, even the paint on thewall begins to need repair. How do youpay for that require? Operating on afixed income does not leave room for extra repair expense, so how does theaverage homeowner afford such an expense? Second mortgages are the most feasible option when repairs are needed orexpansion is necessary. The interestdeduction on a second mortgage if the mortgage is used to increase the value ofthe entire home, execute repairs within the home or increase the size of thehome is a completely tax-deductible interest expense.

What about college education funding? Untilrecently, the most affordable option for college funding and financing was the second mortgage. Over the course of thelast 10 years, private student loans, increased government funding, and theincrease in the nontraditional student enrollment have led to a decrease insecond mortgage options as a funding option for education. It has not however completely eliminated thesecond mortgage is a way to pay for college education; and today many parentsstill find this option the more attractive, affordable, and as a whole, the leastexpensive option for college education funding. After all, we are simply trading an equity investment in our home, foran investment in our child's future.

Now, let'stake a moment to talk about some of the riskier options for taking out a secondmortgage or home. Sometimes, we need totake the step into business ownership; sometimes we lack the funding to takethat step. The equity we've managed toestablish in our homes is an excellent source for that funding but is it thebest option for the funding? Sometimesthe answers you sometimes the answer is no; at any rate it is quite often theoption most exercised by would-be entrepreneurs. My suggestion here is this: if you're takingthe money to open a business that is a continuation of your businessbackground, a business in which you have extensive experience and knowledge,then I believe you're making a wise investment. Otherwise, I would not risk the equity and savings in my home.

Well, we looked at some of the better choices for taking a second mortgage, and welooked at some of the riskier choices for taking out second mortgages, but whatabout some of the just plain nonsense reasons for taking out secondmortgage? What are some of thosereasons? New cars, expensive vacations,or plastic surgery in my opinion would fall under nonsense reasons. But not according to the averageconsumer. Everyday, new cars, vacations,and plastic surgery take place at the expense of home equity savings. Or they legitimate uses of home equity insecond-mortgage funding? Absolutely. Arethey tax-deductible reasons? Probablynot; but nonetheless, consumers use second mortgage money every day to pay forthese choices.

The reasons given and listed here are but a very small few of the actual examples ofconsumers spending of the equity in their home. A second mortgage was a tool intended to aid the consumer and provideaccess to the equity in their home, equity could be used to increase the valueof their home or make worthwhile contributions to their family life. And as usual, some consumers actually use thesecond mortgage for this reason; many consumers, don't. The second mortgage option has become likemany other options in this day in time, a fast way to spend our selves intodeeper debt.

At some point, the consumer will become ready to retire, retire to a home withouta home mortgage payment. The way toaccomplish this end is to build equity in a home and payoff the mortgage. That's one thing you can't do with as amortgage.