What is a second mortgage?
To put it simply, a second mortgage (also known as a home equity loan) is an additional loan you take out on a property that is already mortgaged.
You can secure this mortgage by using your house as collateral and tapping into your property’s equity.
After all, it’s your money!
Why let it sit there? Let that money you’ve earned start working for you!
For lenders, offering a second mortgage is risky as they’re in second position on your title. This means if you default on your payments and the property gets taken into possession, the lender in first position with the original mortgage will always get paid out first. Due to this added risk, rates for second mortgages are always higher than those for primary mortgages.
When you take out a second mortgage, you are using your home as collateral to the lender. This means that if you do not pay, the bank has the option to foreclose just as it does with a first mortgage. That said, because you have a physical asset backing your loan, your interest rate will be substantially lower.
- Debt consolidation
- Borrowing for a major purchase
- Buying a second property
- Renovations
- Investments
- A child’s college education
- Emergencies
And more!
We can determine if this is the best solution for you, based on your unique financial requirements and your goals.
