Getting a second home mortgage can be difficult if you have a bad credit history. However, lenders know that a bad credit rating can be caused by temporary events like unexpected medical bills, repair bills or family crises. They may still be willing to work with you despite your bad credit score. After all, a second mortgage is not very risky to a lender since the equity in your home will be used as collateral for the loan. So do not let your bad credit stop you. Use the tips we give below and radically increase your chances of getting approved for one.

1. Leverage your relationship with your first mortgage lender

Trying to get a second mortgage from a lender different from the one holding your first mortgage has a high chance of being denied. Your first mortgage lender assumes little or no risk in offering you a second mortgage since your house is already collateral for your first mortgage. If you have been a good customer of theirs in good standing for a reasonable period of time it is likely they will want to work with you. You may be surprised at how easy it is to get them to approve you for a second home mortgage loan.
2. Show your lender you are good credit risk despite your credit history

There are three important considerations that you should take into account. First, make sure the origination fee of the loan is low. Second, show the lender that you can afford the new monthly payment and can even pay a bit more to get it paid off quickly. Third, it is critical that you prove to the lender your current finances are stable. This shows the lender that you can afford the loan, and makes approval much easier regardless of your past credit.

3. Know all the fees and costs of the loan to show you are prepared

Talk with the lender and find out all the costs and fees associated with the loan. If you seem like you do not know what you are doing, it is likely the lender will not approve your application. Make sure you show the lender you can afford the closing costs and any other costs associated with the loan. Lenders want to see that you are prepared to shoulder the responsibility of the loan. Demonstrating to them that you are not prepared is the fastest way to get denied for the loan.

Lenders know that credit histories are not always accurate, and are always willing to work with you if you show them you are being responsible and know what you are doing. When you make an effort to get on with your life and fix past mistakes, lenders recognize that. Just show them that you are responsible and credit worthy. Your bad credit history does not have to stop you from getting a second home mortgage.  Thomas Straub