Applying For A Second Mortgage - What To Know

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Want To Know If You Qualify For A Second Mortgage?

Wondering if you qualify for a second mortgage? It all depends on the equity in your home and your credit.

This is where we come in handy! We will:

How About A Second Mortgage?

You already got a mortgage on your home.

But what happens in the case of any eventuality?

Often than not, you have heard people talk about a second mortgage. Perhaps you are aware there is an existing mortgage on your neighbor's home, yet they get to apply for a second mortgage.  You might be wondering - How is that even possible? Chances are you are not alone. Many homeowners today are unaware of the fact that they can get a second mortgage on their home.

Second Mortgage – What Is It?

A second mortgage simply put, is an additional mortgage taken against an already existing mortgage on your home. Here, while the first mortgage is still in effect, a second mortgage is given to the homeowner that runs concurrently with first.

How Does It Work?

Repayment follows installments over a period of time. However, the interest rate on a second mortgage is quite higher. Furthermore, you get the additional loan from a second mortgage lender based on the equity in your home. Practically, a second mortgage allows you 95% of the equity in your property.

Why Is The Interest Rate On A Second Mortgage Higher?

A second mortgage lender is at risk of losing money, hence the higher interest rate. Basically, he ranks behind the first mortgager. That is to say, in the case of any default, if your property gets sold he is considered second while the first lender is fully paid.

Why Do People Take On A Second Mortgage?

Have you tried accessing some of the equity in your home and your lender refuses? Perhaps a second mortgage is the way to go. You can use a second mortgage for anything from funding a child’s college education to making improvements on home, purchasing a car and more!

You don’t have to hit rock bottom with your finances. For more inquiries, feel free to contact us any time!