I’m pretty young and I don’t know a lot about mortgages in the first place but how and why can you take a second mortgage on your house to gain a bunch of money? I hear people say it all the time in shows and movies and it sounds like a very bad thing.
In: Economics
Yeah. Without going into much detail (see the other posts for reference) its actually easy:
You: i need 100.000$
Bank: Nahhhh
You: I got this house, worth 200.000$
Bank: Oh nice, heres 100.000$, you gotta pay us 1000$ a month until we got the 100.000$ + some extra back. If you fail to pay in time we just fucking take your house and sell it ;P
You (5 Years later): Dude sorry, i still owe you 60.000$ but i need a new fancy car
Bank: Sure dude, heres another 70.000$ (second mortgage) but now you pay us 1700$ dollar a month or we take your house
You: Wohooooo new fancy car
You after next month paycheck: Oh damn i only make 2100$ a month.. guess im fucked
Easy example why its used in movies as “bad call” most of the times….
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