There is one thing good about being a single parent applying for a second mortgage: You don’t have to fight a partner when to it comes to facing a mountain of debt and slewing your budget. You’re single so you can make sound money decisions on your own. So, why choose second mortgage as a loan option?
Here are the benefits of a second mortgage:
Catch up on your bills – It is not good to miss payments. One of the most obvious downsides of incurring debt is that you have to repay it with interest. Failure to keep up with your payments, especially on mortgages, exposes your property that serves as collateral to repossession by the lender. Second mortgage allows you to borrow against your home equity – so you can allocate a portion of the loan proceeds to debt payments. As you pay off multiple debts, you will also free up your cash flow and give it an allowance for growth. How? Instead of using your cash to pay your debts and accumulating interests and charges, you can use them to pay for your needs and to invest it into a profitable financial vehicle.
How should you use second mortgage proceeds to pay for your bills? It is important to consolidate debt and to create a strict budget so you can pay your debts on time.
Meet your child’s needs
Raising a child from day one is costly—and you have to shoulder it by yourself. But many single parents are doing just fine – they don’t dwell on pity party and they are not caught up in a debt trap. It is because whether you’re stuck in debt or not, using up second mortgage can help you manage your finances wisely. If you’re staring at a stack of debts, unpaid credit card bills and letters from debt collectors, don’t think for a moment that you cannot give your child a good future. There is always a way, and second mortgage is just one of them.
Here are some strategies for single parents in the trenches:
- After paying off your outstanding debts, it is time to rebuild your credit. Maybe your score has been terribly lowered because of bad credit. While you may not want to get another credit after securing your loan with your home equity, for the second time, getting one and paying on time help you rebuild your credit. Just make sure that the card issuer shall report to the credit report bureaus, otherwise, you will defeat the purpose of getting another credit card.
- Replace old credit habits with healthy ones. A good example is automating your payments – both on utility bills and credit card statement.
- Save as much as you can. Don’t settle for ten percent of your paycheck, you can add more depending on what is left. You can also put money into your retirement accounts and student fund for your kids.
Keeping your finances under control doesn’t mean denying your children a comfortable life. It is just a matter of budgeting and sticking to it. The benefits of second mortgage is truly undeniable, it gets you out of a financial mess and helps you put your finances in order. For more information about second mortgage, get in contact with our friendly team today!
