Can you have 2 secured loans on your property from the same company?
December 9, 2008 - I thought this was illegal. A couple I know have a secured loan on their propertyof 5k, the same company who gave them this then gave them a second loan secured again on their property of 12k which puts them in negative equity and unable to remortgage.
Is this legal practice and do they have any redress against the company who put them in this position?
- This is not illegal. This is standard practice. Normally, an appraisal is done prior to the loan to insure the lender is not olaning more than the property is worth. Here is some additional info. Hope this helps.
- Yes, it is legal. As the note gets paid down then equity will increase. They in effect have two mortgages. If they need more cash then they are in big trouble.
- no it is allowed but there interest rates will be extremely high
- Perfectly legal. You say they are unable to remortgage? It sounds like they have taken enough mortgages for a while. What they need to do is cut up those credit cards, they are living way beyond their means!...which spells trouble. Good Luck to them!
- Did the company hold them at gun point and make them take the loan? Lots of people have negative equity. It is not illegal.
- Yes. As long as their is adequate equity in the property. They don't care if you cant pay it back, they can then repossess the house!
This is perfectly legal here in Kansas. We currently have a 1st and 2nd mortgage on our home too..And we are 5,000 upside down from being able to sell our house and clear the notes..The company knew how much money we needed and what for and the appraisal came in surprisingly high..There are also many companies out there now offering 125% loan to value..So BEWARE!! This is not a good thing for any home owner to do!!
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