Is it time to consider getting a second mortgage and across the GTA ?
What is a second mortgage?
A second mortgage is simply a secured loan against the equity in your home. This loan does not affect your original mortgage.Most lenders will let you borrow up to 85% of the value of your home equity. As an example, if your home is valued at $500,000, and you still owe $300,000, then your home equity is $200,000 and most lenders would allow you to borrow up to $125,000 in a second mortgage.
Generally speaking, the interest you will pay on a second mortgage is going to be higher than what you are paying on your first mortgage but still much less than you would have to pay on unsecured loans such as credit cards or personal lines of credit.
Why should I consider getting a second mortgage?
Traditionally, people use second mortgages for a variety of purposes such as funding home renovations, purchasing a vehicle or getting start-up capital for a business. In this time of economic crisis however, you may want to consider a second mortgage just so you have enough cash on hand to meet your anticipated needs over the next few months. Another great reason to consider a second mortgage is for the purpose of debt consolidation. As mentioned, the interest rate on a second mortgage will usually be much lower than on other types of debt – so depending on how much debt you have currently, you could end up saving thousands of dollars on interest.
Are there any drawbacks to getting a second mortgage?
The main thing that you have to remember when you apply for a second mortgage is that you are borrowing against your home. It is important therefore to have a solid plan in place for paying back the loan. If you become unable to pay, you could risk losing your home. Working with a professional mortgage broker is extremely important to help prevent this from happening!
Contact SUNMICRO Financial today!
If you would like to learn more about second mortgages across the GTA and discover whether this option is right for you, call us today to speak with a member of our team.