 |
If you need money to get a handle on your finances or make improvements to your home, a second mortgage may be the answer! Here we’re going to go over the benefits of a second mortgage, and what you need to look out for. |
How do You Get a Second Mortgage?
Getting a second mortgage is easy. You can get them through your bank; but make sure you know that you’ll end up paying a penalty because most second mortgage payments don’t kick in until you pay off the first one. These are far riskier for the lender than a first mortgage, and they’re riskier for you as you are risking your home and may not be able to repay the loan.
To get the best second mortgage you need a mortgage broker. We work for you, helping you get the best rates without being locked into just one bank to give you options. When one lender knows they have your business, they won’t try to be competitive; but when a mortgage broker can shop your loan around town, you’ll be able to get a better rate and loan amount. You would be surprised at how much just a fraction of a percentage of your mortgage can save you over a decade!
Do Second Mortgages Help?
A second mortgage can be used for things like debt consolidation and repayment, home improvements, buying another home so you can rent your present one out and more. Before you take out a second mortgage you’re going to want to speak with a mortgage broker to make sure you get the best rate. Second mortgages should be used wisely; you’ll also want to make sure you’re taking out a second mortgage for the right reasons.
Second mortgages aren’t free money, so use it wisely. You’ll most likely have to pay expensive fees to take another mortgage out on your home or property, and the paperwork can be hard to deal with. That’s why you need a Toronto mortgage broker to handle your second mortgage; there are so many things that can go wrong and you want someone who can walk you through the process and answer all of your questions.
One thing you should be careful about with a second mortgage is repayment. You will want to repay your loans; your home is your equity and if you ever want to lean on your home for retirement or to sell later, you’ll want to make sure that you can repay the second mortgage that you take out on your home. Make sure you’re borrowing money for the right reasons!
Get a Second Mortgage:
When shopping for a second mortgage, it’s a good idea to first check with the lender of your first private mortgage; don’t count on their rates being the best though! The rates will likely be slightly higher than your original loan (also known as a senior mortgage), so those ¼% to ½% percentage points will really count.
Second Mortgage article courtesy of Mike McEwen. Mike is a mortgage broker who can handle all of your mortgage and/or second mortgage needs in the Toronto area. Contact Mike at HomeBaseMortgages.ca