Colorado Second Mortgages

Written by Amy Hall
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Colorado second mortgages are often referred to as Colorado home equity loans. Basically, a second mortgage is a loan secured by real estate that already has a mortgage on it. The amount of a second mortgage is determined by the amount of equity the owner has in the home. Equity is the difference between what the borrower still owes on the house and the value of the home.

Why do consumers take out Colorado second mortgages? Well, for one thing, many homeowners decide to go this route if they have a lot of high interest credit card debt that they wish to pay off. The interest on the second mortgage is also tax deductible, so in essence you can save money by taking out another mortgage. Other reasons why consumers take out Colorado second mortgages are because they wish to make expensive home improvements, pay for college tuition, or perhaps start a business.

The Value in Colorado Second Mortgages

While second Colorado mortgages can be beneficial for some consumers, they may not be such a great idea for other consumers. For instance, if you take out a second mortgage to pay off your high interest credit cards, you must be careful about racking up charges again on those cards. Some consumers pay off all of their credit cards, only to run them up again within a year. In this situation, you now have to pay back your first mortgage, your second mortgage, and all the credit card debt you have.

If you have difficulty managing your spending on credit cards, a second mortgage may actually be dangerous for you to consider. You may wish instead to consult with a reputable credit counseling agency that can help you manage your finances better. It pays to weigh the risks with the benefits when considering taking out a second mortgage on your home.

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