The pros and cons, the technical jargon thats involved with it all...or we can keep it friendly. Okay here we go.

The pros and cons of a second mortgage. Well really this is between you and your significant other and your bank account, however it does have a few advantages which we will cover as we go along. First of all using your home to borrow money has alot of advantages, gotta love equity. It wasn't that long ago when there was tight rules and caps on borrowing this way. Not to mention the circumstances had to be approved. Believe it or not at one time (as many of you may remember) going into the bank in your Sunday best and asking about a second mortgage was quite literally considered by many to mean you were in dire financial trouble. 'Tis true.

Nowadays, this process of getting a second mortgage or a home equity loan is alot less complicated and there are a huge selection of loans available to you. Side bar : the more people applying, the more competition grows with bank and loan corporations which can some times result in your rate actually being below prime. Another great thing is that you can even take your homes worth and turn it into a line of credit. Which is nice because you now have a better credit rating and peace of mind. Don't go overboard, always take a loof at your future financial obligations first. You do not want the repo man knockin at your door.

A second mortgage works much the same as your first mortgage did. You have to apply to a lender who will look at the loan to value and the extent to which you match the criteria. If you have bad credit, then there are adverse credit mortgage lenders who will offer a second mortgage on your home, even if you have County Court Judgements and mortgage arrears on your record.

One key issue when it comes to getting a second mortgage is the amount of equity you have in your home. The chances are that if you have owned your home for a while, it will have increased in value. After all, most homes in the UK have done so in the last five years. So it seems likely that you will have built up some equity in the home - and since your property will be high in value, the loan to value ratio is likely to be attractive to adverse mortgage lenders and others.

Mortgage Benefits

Aside from the benefit of releasing much needed cash, the other benefit of a second mortgage is that you get that cash at a very favourable rate. The rate you pay will be a mortgage interest rate, which is generally lower than the interest rate on unsecured loans, and much lower than the rate you would pay if you took a cash advance on your credit card. That's because a second mortgage is a secured loan - and it's secured on your house.

This need not be a worry if your finances are stable, but it is a concern if you think you might have difficulty with payment. Remember, you already have one mortgage on your home and the mortgage lender has a first charge on your home. That means that if you stop paying, that lender can seize your hose. A second mortgage puts a second charge on your home, meaning that the second mortgage provider can take a share of any proceeds if your home has to be sold. What is worse, if you pay the first mortgage but fail to pay the second, that mortgage provider can seize your home, even if the sum involved is relatively small.

Getting a second mortgage is therefore something you should consider very carefully. Weigh the pros and cons and be honest about your ability to repay both the first mortgage and the second mortgage.

How can I get a mortgage with CCJs?

Before you apply for a mortgage, check your credit record to see if there are any CCJs against you. CCJs can be issued without your knowledge, for anything from very large unpaid debts, to an unintentional non-payment of a utility bill. Unless you settle the debt within a month, the CCJ will remain on your credit record for six years, which could impact your mortgage application. If you have paid your debt, you can obtain a "Certificate of Satisfaction" which shows the mortgage lender that you have cleared the debt. Whilst this payment may not allow you access to mainstream mortgage products, you can get a mortgage with CCJs, cleared or uncleared, on your record.

To apply for a mortgage with CCJs, you need to approach a specialist broker. There are a number of lenders that have created mortgage products especially for this market, and a good broker will have access to most, if not all of these products.

What can a mortgage with CCJs do for me?

No matter what your level of debt, you should be able to get a mortgage. Although CCJs show that your creditors are serious about pursuing you for the money you owe,there's no reason why this should stop you from becoming a property owner. Firstly, you should see if you can settle the debts that are covered by the CCJ. This will show the lenders that you are willing to be serious about reducing your debts, which may put your application in a more positive light. If you can pay your CCJ debts immediately, then do so, or work out a regular payment plan that allows you to reduce your debts gradually.

Although a mortgage with CCJs is another loan, it can actually help your credit rating. The mortgage interest rate may be slightly higher than for traditional mortgages, and there may be some restrictions on early redemption of your mortgage, but if you can show that you are meeting the monthly payments, then your credit rating may improve. More importantly, a mortgage with CCJs lets you get on the property ladder, or move up it, increasing the amount of equity that you may hold in your property.

Can I apply for a mortgage with CCJs now?

If you want a mortgage and you have CCJs against you, you can still apply for a mortgage. Simply contact a regulated, specialist broker, who will be able to look at your current circumstances and the amount you can afford to borrow, and recommend the best products for you. Don't think that you are the only person that's applying for a mortgage with CCJs. There are approximately one million CCJs issued against individuals each year and dedicated brokers and lenders are there to make sure that you can still buy the property you want, regardless of the judgements against you.

Useful second mortgage links