Obtaining a second mortgage may seem conceptually challenging and a difficult decision to make. However, in necessary circumstances it can potentially help solve several financial issues. With a brokerage like Triple M Mortgages, you can speak to a broker who will guide you through the process of obtaining a second mortgage.
What is a Second Mortgage?
A second mortgage is another loan given on an already mortgaged property. To obtain this mortgage loan, similar to traditional mortgage process, you are required to apply for the mortgage loan.
With this type of mortgage, you are given a lump sum payment and you can borrow funds on your home as equity. You may need to use this equity to fund renovations, or other home projects, or even purchase a new vehicle. A second mortgage can help with all of this.
Why Obtain a Second Mortgage?
When you have many financial obligations and responsibilities you may need assistance to help with your debt. A second mortgage could help you. If you have many different payments to make, a second mortgage can help with debt consolidation, bringing all your payments into one payment. Credit card debt and large renovations can also be taken care of by getting a second mortgage, as well as building equity.
Many people find this type of loan because it often has tax-deductible interest payments, lower interest, and a longer repayment period.
How does a Second Mortgage Work?
With a second mortgage, you take out a loan, you borrow against the value of the house while subtracting the balance of the primary mortgage. Remember, the second mortgage is a loan tied to your home, so if you fail to make payments you can consequently lose your home as a result. Make sure you are able to make payments.
Home equity is used for this loan. You leave some of the equity in the home, and take out a set amount of equity. Ask your mortgage lender about the percentage you can take out, you may be able to take out 80% to 90% of your equity.
What Will You Need?
There are a few things you will need besides documents, to get a Second Mortgage.
- Equity: You will have better chances of getting a second mortgage if you have home equity.
- Credit Score: The higher the credit score, the better your chances of getting a mortgage with good rates.
- Property: This is where you will be equity.
- Income: If you can show you make regular payments, it will go far to help you qualify for a second mortgage. Lenders like to see you have a steady income.
Why Use a Broker for a Second Mortgage?
Mortgage brokers have access to a wide variety of resources to find lenders, insurance companies, private funding, banks, and trust companies. This gives them, and you, access to better rates and even more loan opportunities. Brokers also are well trained and have experience, knowing where to look and who to ask to get the best rates and loans. Mortgage brokers often give you personal service with more flexibility and options.
Triple M Mortgages can help you discover if a Second Mortgage is the right choice for you. Contact us if you have any questions.