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How Second Mortgages allow you to Borrow from Your Own Pocket?

How Second Mortgages allow you to Borrow from Your Own Pocket?

Second Mortgage options in Markham if bought after through research, can give you a great return on your equity owned. It is almost like borrowing from your own pocket and earning returns on it. For those who are new to the second mortgage, it is simply a loan you can borrow from a lender by offering him a collateral being your equity left in the home after deducting your first mortgage. Wondering how it can it not cost you much to borrow a second mortgage in spite of already having the first mortgage? Let’s see:

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Way’s You Can Use a Second Mortgage as an Opportunity:

Erase The High Rated First Mortgage Off Your Cards:

This is the most common reason for one borrowing through a second mortgage. When the mortgage interest rates in the market take a steep fall, it is better to purchase a new mortgage at a lower rate and pay off the initial mortgage to the full.

Second Mortgage Markham

Build the Resale Value of Your Home:

The second mortgage can be borrowed to renovate your home for a better resale value. At the time of resale, owners usually furnish and polish their home to make it more presentable to the buyer. Newly renovated strong houses give a higher resale value.

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Give Wings to the New Business Opportunity:

That store you wanted to open or the idea you wanted to fund, that product you wanted to make or the trade you wanted to can now all be possible at a second mortgage rate. Mortgage rates would allow you to reach your break even quickly.

Lend on an Unorganized Platform:

Since mortgage collateral’s are strong and physically immovable, the lending rates are quite low compared to other financing options. This allows you to lend your money to another at a higher rate and save the difference in rates for your good.

Benefits of Second Mortgage

Why Should You Take a Second Mortgage?

A Mortgage simply refers to a loan where the collateral is specifically a residential property. A second mortgage is a loan borrowed in spite of an existing ongoing loan against the property. Thus in a second mortgage the risk of the lender is higher than the risk of the first mortgage lender. The first mortgage lender has the initial rights over the property to clear off his share after which the second mortgage lender has a right.

Click here to avail a Loan of 80% of the value of your home

Usually the loan you can avail from a second mortgage is around 80% of the value of home, but it differs from situation to situation. Since the risk of the second mortgage lender is high, the interest rates are also higher than the first mortgage market rates at a particular time. That is why consulting a broker has become very necessary to secure a good deal in the mortgage market. Brokers have no charge for their consultancy, they are simply paid by their network of lenders.

Lump Sum Availed from the Second Mortgage Can be Simply Used for Anything:

Cover the Down payment of Your First Mortgage

A second mortgage can be availed to cover the down payment of the first mortgage only after which you will be able to avail the first mortgage. You can also avoid Private Mortgage Insurance using your second mortgage.

Secure a Better Interest Rate

Being a volatile market, you can avail a second mortgage at a low interest rate and simply pay off your first mortgage with the lump sum received. You can also pay off your high rated debt obligations such as your credit card dues using the second mortgage.

Meet Emergency Financial Obligations

Emergency medical expenses or higher education expenses can easily be covered by a readily available second mortgage. The rates are much lower than other borrowing options in case of a second mortgage.

Move to Another Lender

A lender having better terms and conditions can always be approached and availed by borrowing a second mortgage on your home and using the lump sum to pay off your first lender. You can convert from bank to a private lender or vise versa using a second mortgage.

Interest payments on Second Mortgage are usually tax deductible unlike other interest payments such
as your credit card interest charges.

Second Mortgage Richmond Hill

Track the Real Estate Market

In order to not lead you to a financial trap, be aware of how much your house is valued and what is an ideal deal you could get without making your financial position crash. Before you finalise that a Second mortgage Richmond Hill is your option, acknowledging the fact that rates are higher and servicing two debts might become a rather difficult job is important.

Second mortgages richmond hill


Your financial status is screaming signs

Don’t ignore your current financial standing and make the mistake of overestimating it. The best specialists out there can strive hard to get you a cheap deal but second mortgages are expensive and so why you need this money should have a very good answer so as to not fall into the risk of losing your house. Compare statistics and rates, check trends, discuss with various brokers extensively and keep reassessing whether the second mortgage is really your best option.

second mortgages richmond hill