5 reasons to get a second mortgage

Sponsored content Jun 08, 2015 Scarborough Mirror

Do you need access to money but aren’t sure what kind of loan is right for you? If you have equity built up in your home, a second mortgage might be the answer.

As defined by Investopedia, a second mortgage  is: “A type of subordinate mortgage made while an original mortgage is still in effect.” Second mortgages are typically backed against your home or other real estate property, as they require you to have some equity to borrow against. This equity can be from a large original down payment, from your principal mortgage pay down, or from the appreciation of your property. You may be able to refinance up to 85 per cent of your home’s value thanks to a second mortgage.

A loan can allow you to meet a variety of goals or objectives. Let’s look at the top five reasons to get a second mortgage.

For Investment Purposes

Sometimes, it takes money to make money. Taking out a second mortgage could help beef up your investment portfolio. An RRSP loan, for example, could allow you to maximize your contribution and give you a fat refund. Another possibility is using it for a pension buyback, which often needs to be done in a lump sum. By using a second mortgage, you can pay off the loan in smaller, more manageable monthly payments.

To Buy a Second Property

Another popular reason for a second mortgage is to fund the down payment for an income or vacation property. Traditional banks usually require 20 per cent down for the purchase of a second property. To quickly fund the down payment, it’s often possible to borrow against real estate you already own, such as your primary residence or other rental properties. Using leverage – in other words, using borrowed money – is best when it’s done to buy assets.

For Renovations

With spring upon us, maybe you’ve discovered your roof is leaking. Or maybe it’s finally time for that new kitchen you’ve always wanted. Taking out a loan for home renovations isn’t always easy, as you need access to a large sum of money. A second mortgage allows you to access your home’s equity, and to get the work done.

For School

Are you stuck in a dead-end job? Are you ready for a career change? If you qualify for a loan and can meet your monthly payments, a second mortgage can be used to go back to school. It can also be used to help pay for your kids’ education. Since going back to school can help get a better paying job, it’s a great investment.

To Pay Off High Interest Debt

If you are paying 15 per cent, 20 per cent, or even 30 per cent interest on your credit card balance, a second mortgage can help improve your finances. You’ll lower your interest payments, which can help you work your way out of debt. Just make sure to stop using those credit cards once they are paid off!

How Do I Get a Second Mortgage?

The first step is to contact a licensed mortgage broker. The professionals at the Mortgage Broker Store can help you through the process, telling you within minutes if you qualify for a loan. They will negotiate with lenders on your behalf, to give you the lowest possible interest rate. They will set up your monthly payments and get you the money you need for your next project.

What to Keep in Mind

Interest rates on second mortgages tend to be a bit higher than on first mortgages. They are still, however, an affordable option, since they are secured loans – meaning backed against your assets. Second mortgages are a bit more risky for lenders, since primary mortgage holders must be paid first in the case of a foreclosure. Lenders offset this risk with slightly higher rates. Still, the rates are much lower than those for unsecured loans, such as certain lines of credit or credit cards.

Finally, don’t overextend yourself. There are risks when taking on a second mortgage, as you are using your home as collateral. If the unfortunate happens and you can’t make your payments, you could potentially be forced out of your home. Make sure you’ve carefully considered the advantages and disadvantages of taking on more debt.

To learn more about all types of loans, including second mortgages, please visit the Mortgage Broker Store website. You may also call them directly at 416-499-2122 to speak to a licensed mortgage broker. They will be happy to answer all of your questions and provide you with a free mortgage quote.

5 reasons to get a second mortgage

Sponsored content Jun 08, 2015 Scarborough Mirror

Do you need access to money but aren’t sure what kind of loan is right for you? If you have equity built up in your home, a second mortgage might be the answer.

As defined by Investopedia, a second mortgage  is: “A type of subordinate mortgage made while an original mortgage is still in effect.” Second mortgages are typically backed against your home or other real estate property, as they require you to have some equity to borrow against. This equity can be from a large original down payment, from your principal mortgage pay down, or from the appreciation of your property. You may be able to refinance up to 85 per cent of your home’s value thanks to a second mortgage.

A loan can allow you to meet a variety of goals or objectives. Let’s look at the top five reasons to get a second mortgage.

For Investment Purposes

Related Content

Sometimes, it takes money to make money. Taking out a second mortgage could help beef up your investment portfolio. An RRSP loan, for example, could allow you to maximize your contribution and give you a fat refund. Another possibility is using it for a pension buyback, which often needs to be done in a lump sum. By using a second mortgage, you can pay off the loan in smaller, more manageable monthly payments.

To Buy a Second Property

Another popular reason for a second mortgage is to fund the down payment for an income or vacation property. Traditional banks usually require 20 per cent down for the purchase of a second property. To quickly fund the down payment, it’s often possible to borrow against real estate you already own, such as your primary residence or other rental properties. Using leverage – in other words, using borrowed money – is best when it’s done to buy assets.

For Renovations

With spring upon us, maybe you’ve discovered your roof is leaking. Or maybe it’s finally time for that new kitchen you’ve always wanted. Taking out a loan for home renovations isn’t always easy, as you need access to a large sum of money. A second mortgage allows you to access your home’s equity, and to get the work done.

For School

Are you stuck in a dead-end job? Are you ready for a career change? If you qualify for a loan and can meet your monthly payments, a second mortgage can be used to go back to school. It can also be used to help pay for your kids’ education. Since going back to school can help get a better paying job, it’s a great investment.

To Pay Off High Interest Debt

If you are paying 15 per cent, 20 per cent, or even 30 per cent interest on your credit card balance, a second mortgage can help improve your finances. You’ll lower your interest payments, which can help you work your way out of debt. Just make sure to stop using those credit cards once they are paid off!

How Do I Get a Second Mortgage?

The first step is to contact a licensed mortgage broker. The professionals at the Mortgage Broker Store can help you through the process, telling you within minutes if you qualify for a loan. They will negotiate with lenders on your behalf, to give you the lowest possible interest rate. They will set up your monthly payments and get you the money you need for your next project.

What to Keep in Mind

Interest rates on second mortgages tend to be a bit higher than on first mortgages. They are still, however, an affordable option, since they are secured loans – meaning backed against your assets. Second mortgages are a bit more risky for lenders, since primary mortgage holders must be paid first in the case of a foreclosure. Lenders offset this risk with slightly higher rates. Still, the rates are much lower than those for unsecured loans, such as certain lines of credit or credit cards.

Finally, don’t overextend yourself. There are risks when taking on a second mortgage, as you are using your home as collateral. If the unfortunate happens and you can’t make your payments, you could potentially be forced out of your home. Make sure you’ve carefully considered the advantages and disadvantages of taking on more debt.

To learn more about all types of loans, including second mortgages, please visit the Mortgage Broker Store website. You may also call them directly at 416-499-2122 to speak to a licensed mortgage broker. They will be happy to answer all of your questions and provide you with a free mortgage quote.

5 reasons to get a second mortgage

Sponsored content Jun 08, 2015 Scarborough Mirror

Do you need access to money but aren’t sure what kind of loan is right for you? If you have equity built up in your home, a second mortgage might be the answer.

As defined by Investopedia, a second mortgage  is: “A type of subordinate mortgage made while an original mortgage is still in effect.” Second mortgages are typically backed against your home or other real estate property, as they require you to have some equity to borrow against. This equity can be from a large original down payment, from your principal mortgage pay down, or from the appreciation of your property. You may be able to refinance up to 85 per cent of your home’s value thanks to a second mortgage.

A loan can allow you to meet a variety of goals or objectives. Let’s look at the top five reasons to get a second mortgage.

For Investment Purposes

Related Content

Sometimes, it takes money to make money. Taking out a second mortgage could help beef up your investment portfolio. An RRSP loan, for example, could allow you to maximize your contribution and give you a fat refund. Another possibility is using it for a pension buyback, which often needs to be done in a lump sum. By using a second mortgage, you can pay off the loan in smaller, more manageable monthly payments.

To Buy a Second Property

Another popular reason for a second mortgage is to fund the down payment for an income or vacation property. Traditional banks usually require 20 per cent down for the purchase of a second property. To quickly fund the down payment, it’s often possible to borrow against real estate you already own, such as your primary residence or other rental properties. Using leverage – in other words, using borrowed money – is best when it’s done to buy assets.

For Renovations

With spring upon us, maybe you’ve discovered your roof is leaking. Or maybe it’s finally time for that new kitchen you’ve always wanted. Taking out a loan for home renovations isn’t always easy, as you need access to a large sum of money. A second mortgage allows you to access your home’s equity, and to get the work done.

For School

Are you stuck in a dead-end job? Are you ready for a career change? If you qualify for a loan and can meet your monthly payments, a second mortgage can be used to go back to school. It can also be used to help pay for your kids’ education. Since going back to school can help get a better paying job, it’s a great investment.

To Pay Off High Interest Debt

If you are paying 15 per cent, 20 per cent, or even 30 per cent interest on your credit card balance, a second mortgage can help improve your finances. You’ll lower your interest payments, which can help you work your way out of debt. Just make sure to stop using those credit cards once they are paid off!

How Do I Get a Second Mortgage?

The first step is to contact a licensed mortgage broker. The professionals at the Mortgage Broker Store can help you through the process, telling you within minutes if you qualify for a loan. They will negotiate with lenders on your behalf, to give you the lowest possible interest rate. They will set up your monthly payments and get you the money you need for your next project.

What to Keep in Mind

Interest rates on second mortgages tend to be a bit higher than on first mortgages. They are still, however, an affordable option, since they are secured loans – meaning backed against your assets. Second mortgages are a bit more risky for lenders, since primary mortgage holders must be paid first in the case of a foreclosure. Lenders offset this risk with slightly higher rates. Still, the rates are much lower than those for unsecured loans, such as certain lines of credit or credit cards.

Finally, don’t overextend yourself. There are risks when taking on a second mortgage, as you are using your home as collateral. If the unfortunate happens and you can’t make your payments, you could potentially be forced out of your home. Make sure you’ve carefully considered the advantages and disadvantages of taking on more debt.

To learn more about all types of loans, including second mortgages, please visit the Mortgage Broker Store website. You may also call them directly at 416-499-2122 to speak to a licensed mortgage broker. They will be happy to answer all of your questions and provide you with a free mortgage quote.