If you are currently a homeowner and have been making regular payments on your mortgage every month, you could have accumulated a substantial amount of equity in your home. Your home’s equity is the difference between what you owe on your mortgage and your home’s overall value, meaning that the more payments you make towards your mortgage, the more equity you could have in your home.
Having an increase in home equity opens up a lot of doors for homeowners that they might not have ever thought about. This includes obtaining a second mortgage. So, to help provide some clarity, Gert Martens, your local mortgage broker, has explained what a second mortgage is and the benefits in obtaining one.
What Is A Second Mortgage?
A second mortgage is an additional home loan that is taken out on your house, where your home is put up as collateral in case you default on your payments and are unable to pay back your broker. This mortgage does not replace your original mortgage, it is in addition to. This means that you will have to make two separate payments towards your mortgage every month.
In order to qualify for a second mortgage, the requirements are the same as when you applied for your first mortgage, which includes having a steady income and a good credit score. Also, it is important that you are not in large amounts of debt. You will not be approved for a second mortgage if you owe too much on your first mortgage, so be sure and pay off your home loan as much as you can before you apply.
Benefits Of A Second Mortgage
When you obtain a second mortgage, you gain access to a large sum of money by tapping into your existing home equity. Once you have this money, there are no restrictions on what you can use it for.
So, if you wish to purchase more real estate with this amount, you can. Or, you can use this money to help pay for your child’s college tuition or you can even pay off any loans you may have accumulated over the years. Taking out a second mortgage can also be used to fund a luxurious vacation or purchase a dream car.
Get Started Today
Whatever the case may be, a second mortgage can offer you immense financial benefits. So don’t wait, contact your local mortgage broker, Gert Martens, today at 780-933-0109 to get started!