Secured Debts Why Your House Mortgage Must Not Be Overlooked


Secured Debts Why Your House Mortgage Must Not Be Overlooked 1

Secured Debts Why Your House Mortgage Must Not Be Overlooked
A simplify definition of​ debts are money due or​ own to​ people under an express agreement to​ repay. They usually arise because of​ a​ service or​ goods provided to​ you.
While it​ seem logical that all debts involved around money owned to​ others. There are in​ fact 2 different types of​ debts as​ far as​ your financial health is​ concerned. They are secured and unsecured debts.
Identifying your debts and classifying them into secured and unsecured debts are important. the​ reason being you​ will have more to​ lose financially if​ you​ ignored on​ your secured debts.
Secured debts refer to​ any loan or​ credit that was obtained by allowing your lenders to​ put a​ lien on​ a​ piece of​ valuable property that you​ own. These properties can be your house,​ auto,​ yacht and even expensive jewelries. Properties put on​ lien are also known as​ collateral.
A secured loan amount is​ usually based on​ the​ valuation of​ the​ property,​ and is​ based on​ the​ principle that if​ you​ fail to​ pay or​ default on​ your payment,​ your lender has the​ right to​ repossess and confiscate the​ property to​ recover their loan amount owned. Your house and auto loan are most likely secured loan.
Losing a​ collateral put up for a​ loan is​ to​ be avoided whenever possible. When that happens,​ you​ also lose all the​ payment that you​ have already made on​ that collateral asset. the​ worse part is​ that you​ are also liable if​ the​ sales of​ that collateral do not cover the​ loan amount that you​ own.
When you​ lose your collateral especially your house which is​ known as​ foreclosure,​ it​ will affect your financial health greatly as​ there is​ nothing that will hurt your credit rating more than a​ foreclosure. Even bankruptcy does not cause so many damages.
Be it​ foreclosure or​ your auto being repossess,​ a​ secured loan will drain you​ up excessively if​ not handled properly,​ it​ is​ wise to​ prioritize your secured loans and mortgage payment whenever possible.



Secured Debts Why Your House Mortgage Must Not Be Overlooked



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