Having too much debt can be quite a predicament if income ever decreases, becomes irregular, or dries up for whatever reason. Not something to take lightly.
Having a double mortgage is a double whammy and I would not want to pay for both mortgages. Its a disastrous case when it happens. I remember watching a episode a couple years ago of the show "House Hunters" and one guy said he was not moving out of the current house he was living so he would not get a double mortgage.
I never really got the idea behind a double mortgage anyway. You get your first one to buy the house... ok that's normal. But what is the second one for, seeing as the house is already paid for? I can imagine some things such as unexpected damage that requires repairs etc but surely, in the very large majority of these cases, you could finance the repairs with a small debt that would be paid back in a few months. So I don't see how this would become a long term situation for anyone. then again, most people have their own personal finances in such a mess that I don't know how they have made it this far.
Getting a second mortgage is something rare in the UK too. I do wonder why people do this. Surely by the time one has a mortgage free house their expenses reduce significantly. I would not risk repossession by taking out a second mortgage.
I have a very close friend who had a double mortgage. She came by our office one Saturday morning so that she could write a letter to the bank because the interest on her double mortgage had increased by thirty percent. She is one of the luckiest people I know because she received a lump sum that helped her clear her mortgages. Her house is now completely hers; I hope that it remains that way.
I do not understand why people would ever pay double mortgage. I think it is quite a great burden to keep paying double mortgage. A lot of people would never prefer to do such a thing. I do not think it is encouraged in many countries.
That's easy to say shilpa, people get desperate and make crazy moves. One mortgage is dangerous already, so getting a second one is insane IMO.
I am with you Gel, how can people really make such moves unless they are desperate? I think we should not spend more than we have and that's it.
I can remember many years ago when I was a mortgage broker where the lender would often break the purchase loan down into two seperate mortgages - a main loan and a smaller one. I believe this was done by lenders in certain situations where the buyer was riskier and little or nothing to put down.
