If you are in a financial bind, and you own a home, you may be able to use your asset to your advantage. Taking out a second mortgage on your home allows you to receive the money you need without strict qualifications.
If you are interested in taking out a second mortgage loan, get in touch with the brokers to find out how to qualify. Call (416) 258-0156 today.
How Does a Second Home Mortgage Work?
Qualifying for a second home mortgage depends on the current market value of it. While the condition of your home is important, lenders are interested in the amount of equity in your home too.
If you are interested in taking out an additional loan with a different lender, you must first have your home appraised. Once your property’s value has been assessed, we can help you hunt the best rates through various lenders in the area.
Seek advice and detailed explanations from our experienced mortgage brokers. We will ensure you are well informed before taking out a second loan.
How Much Can You Borrow on a Second Mortgage?
A second mortgage is a second loan that you take out on your home on top of your first mortgage. Usually, the homeowner can borrow up to 80% of their home’s total equity minus the balance of their primary mortgage. Once the second is purchased, the two mortgages must be paid off together.
What Is the Repayment Period of a Second Mortgage?
The repayment period of a second mortgage is typically 1-2 years, during which time the borrower will pay an interest rate. At the end of the period, the loan must be paid in full, or the borrower can choose to extend the credit for another few years.
Is a Second Mortgage a Good Idea?
Rates and Risks
While investing in a second mortgage may be the right choice, especially if you want to use your equity during a trying time, there is a level of risk associated with taking out the loan.
Second mortgage rates tend to be much higher than other mortgage rates, like those of your primary loan. In the case that you cannot pay off either of your mortgages, the home must be sold. When the home is foreclosed, the first lender is paid off before the second. Because the second lender takes on the risk of not being repaid, the rates are higher.
Reasons to Consider Getting a Second Mortgage
There are many reasons people may consider investing in a second mortgage, such as:
- Consolidating higher interest rates or debt
- Paying for medical expenses or emergencies
- Financing home renovations or businesses
Whatever the reason, our mortgage brokers are here to help you make the right choice.
Explore Second Mortgage Interest Rates
If you are in the market for a second mortgage, don’t make this big decision without the help of a trusted and experienced broker. The experts have been helping homeowners decide on the best financing options for years.
To find out more, book a consultation today.