Second mortgages

Second mortgages

Taking out a second mortgage on your home used to carry some stigma with it – a sign that you were in financial trouble. But today, the ability to borrow money against your property is considered one of the biggest advantages of owning a home. A second mortgage is essentially a loan secured by your home or another piece of property with a first mortgage. The second mortgage allows the homeowner to tap into his or her equity to pay for college tuition, essential home improvements, pay off credit card balances or other pressing financial needs.

Because there is more risk involved with a second mortgage, the lender's conditions are usually more stringent, the term is shorter and the interest rate is higher than for the first mortgage. In the event of default, the holder of the second mortgage is subordinate to the first.

To qualify for a second mortgage, you must have a fico score of 620 or higher, usually. An appraisal will be required on your home to determine the home's market value.

By definition, a second mortgage is any loan that involves a second lien on the property, but you generally have two options: a home equity loan or a home equity line of credit.

With a home equity loan, you borrow a lump sum of money to be paid back monthly over a set time frame, much like your first mortgage. However, the rate is ususally higher then on your first mortgage. left

A home equity line of credit (HELOC) is an open line of credit tied to an equity-based maximum loan amount. You may use the account for a set period of time (5, 10 or even 20 years) as long as there are funds. Once your predetermined time period is up, you will be required to pay off the loan, making monthly payments on the principal and interest. The interest rate can fluctuate month to month on a home equity line of credit, which makes this option appealing when interest rates are low, but risky when interest rates increase.

When deciding what type of loan is best for you, it is important to consider how you will use the money and how you intend to pay it off. Do you need money in one lump sum or intermittent over several months or years? Do you want a fixed interest rate so you can repay your loan in precise monthly installments or would you rather have the flexibility to make any size payment above the interest-only minimum? I will help you find the right mortgage product for your lifestyle and financial needs.

GET PREQUALIFIED!

If you are buying or refinancing, geting pre-qualified is
empowering. Prequalified buyers are confident, educated buyers.
Pre-qualifying before you refinance means you want to know all
your choices. Simply answer the few simple questions below and I
will respond very shortly.

For a Purchase

Purchase Price:
*Primary home or investment?:
*Down Payment?:
*Max monthly house payment:

For a Refinance

*Loan Amount?:
*Cash out? How much?:
*Current balance on all mortgages:
*What is your home's value?:
*Primary home or investment?:

For Both Purchase and Refinance

*Borrower gross monthly Income:
*Borrower credit--good, fair, poor?:
Co-borrower gross monthly Income:
Co-borrower credit--good, fair, poor?:
*Monthly loan, credit card debt, all borrowers:

Additional Information

Details, such as credit issues, etc.:

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