Second Loan
Is a second Mortgage Supermarket Mortgage right for you?
Home equity lines may be one useful source of credit. They can provide you with a large amount of cash at low interest rates. And they provide you with certain tax advantages unavailable for other types of mortgage loans. Second mortgages require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments/
How much money should you borrow?
Depending on your income and the amount of your outstanding debt, home equity lenders may let you borrow up to 85% of the appraised value of your home minus the amount you still owe on your first mortgage.
What is the interest rate on the second mortgage loan?
Ask about the type of interest rates available for the home equity plan. Most second mortgages have variable interest rates. These variable interest rates my offer lower monthly payments at first, but during the rest of the repayment period the payments may change and may be higher. Fixed interest rates, if available, may be slightly higher initially than variable rates, but fixed rates offer stable monthly payment over the life of the loan.
Are there closing costs?
When you take out a second loan, you pay for many of the same expenses as when you financed your first mortgage. These include items such as an application fee,title search, appraisal, attorneys' fees, and points. You may want to negotiate with lenders to see if will pay for some of these expenses.
What safeguards are built into the mortgage loan?
One of the best protections you have is the Federal Truth in Lending Act, which requires lenders to inform you about the terms and costs of the plan at the time you are given an application Lenders must disclose the APR and payment terms and must inform you of charges to open or use the account, such as an appraisal, a credit report, or attorneys' fees. Lenders also must tell you about any variable-rate feature and give you a brochure describing the general features of home equity plans.
To find out more about second mortgage loans, fill out our online form and a Mortgage Supermarket broker will contact you within a couple of days with more information and a home loan quote, free of charge.
