Second mortgages—or refinancing—is a way for you to receive money taken out of the equity you have invested in your house now. If you have a significant expense coming up—a college education for your child, a major medical procedure, or if you want to pay down credit card debt at a better rate—then a second mortgage on your Florida, California, or Georgia residence may be for you. Home improvements are another reason to get a second mortgage, because the money you spend will increase the value of the property.
There are some caveats, though. Want to refinance in the future? Then a second mortgage now may not be advisable, because the additional debt adds another layer of paperwork and complications to the refinancing process.
Second mortgages take two forms:
- Home equity loans, which are lump-sum payouts from the bank to you. You’ll arrange the delivery and payback terms during the loan process. Conditions typically include repaying the loan gradually over time, often with fixed interest rates and monthly payments.
- A home equity line of credit, which usually comes with a maximum borrowing limit, depending on the amount of equity in your home. Similar to the revolving credit line of a credit card, you can pay off the balance and borrow again.
Just as you did when you applied for your first mortgage, you’ll need to go through credit checks, appraisals, and possibly an origination fee. Credit scores play a role in determining risk, so make sure yours is as high as possible.
At Avrus Financial and Mortgage, we can analyze your current financial circumstances and offer you the pros and cons of obtaining a second mortgage. We’ve spent the past four decades helping people just like you make the right financial choices, and we can help you, too.
Why not ask us how… today?
