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Second mortgages provide homeowners with a tax deductible alternative to high interest consumer loans. If you are interested in buying a new car, home improvement, or financing college tuition, a second mortgage can help you find the money and save more money than many other loans. Apply online today to contact up to four lenders about your second mortgages choice.
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There are many different types of second mortgages available:
- A reverse mortgage is a line of credit available for homeowners of 62 years
and older. This type of loan allows you to draw money as you need or receive
monthly payments for the rest of your life or until you move, even if the
amount of your loan exceeds the value of your house (usually because the home
did not rise in value as expected or the homeowner lived longer than was expected).
This loan, like the home equity line of credit, has an adjustable rate, but
this rate is based on a different index, the Prime Rate which can often be
more reliable than other indexes.
- If you have little or no equity in your home, many lenders will still allow
you to obtain a second mortgage, but it can be risky to secure a loan with
your home if there is not enough equity accrued.
There are many different types of second mortgages available:
- A home equity loan allows you to borrow money based on the amount of equity,
or value, you own in your home. This amount is determined by taking the market
value of your house and subtracting the amount of your first mortgage. If
you own a home that is worth $150,000 and have a mortgage $100,000, $50,000
is the amount of your equity. Most lenders will allow you to borrow any where
from 85% to 100% of this amount.
- A home equity line of credit is also based on your equity. However, instead
of one large advance of cash, a line of credit is opened for you in the amount
of a loan. This amount can be drawn from usually for a period of five to ten
years conveniently using credit cards or checks. Through out this draw period
interest builds only on the amount you have withdrawn. This type of loan is
good for people with irregular expenses since it allows them to draw what
they want when they need it.
A second mortgage is desirable because lenders generally apply low interest rates since the loan is secured by your home. Also, payments on the interest of a second mortgage are tax deductible, allowing you to save money each year. If you need to borrow money a second mortgage may be the best option for you.
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