If you are trying to decide whether or not to use the equity in your home, borrower from a relative or use a credit card, you must understand your loan options. If you secure a second mortgage or line of credit, you should consider whether this is short-term debt or long-term debt. Long-term debt is best suited for a fixed rate second mortgage. Short-term debt can be suited for both fixed rate 2nd mortgages and adjustable rate lines of credit. If you know that you will be moving next year, than a home equity line of credit, may be the best solution, because the payments are minimal, and you only are charged interest on the actual amount of the equity line that you use.
Another question you need to ask yourself...Are there potential risks with a second mortgage. If you decide not to make your second mortgage payment for 120 days in a row, then they can foreclose on your home. If you think you won’t be able to make the 2nd mortgage payment, then an unsecured credit card would at least allow you to keep your home.
I suggest that you analyze your situation, before applying for a second mortgage or credit card. The key to any financial decision is knowing whether or not you can not only afford the payments, but that you feel good about taking this loan out before you make the borrowing commitment. Always ask yourself this question...Am I better off before this loan or after this loan? If you aren’t better off, then you may want to reconsider.
Borris Boston, a business beat writer and home finance analyst writes mortgage related articles for www.second-mortgage-quotes.com. Please contact Second Mortgage Quotes for republishing options.