Ave Mortgage

Opening Doors — Closing Loans

  • Home
  • About
    • About Us
    • Privacy Policy
    • Texas Complaint and Recovery Fund Notice
    • Accessibility Statement
  • Blog
  • Resources
    • Closing Costs
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Mortgage FAQ
    • Mortgage Glossary
  • Reviews
  • Calculator
  • Contact

3 Tips to Consider when Shopping for a Second Mortgage

July 14, 2016 by Kay Monigold

3 Tips to Consider when Shopping for a Second MortgageWhether you’re considering a second mortgage to consolidate your debt or complete some home renovations, there can be a lot that goes into making this financial decision. Because a second mortgage is a loan that goes against the equity you currently have on your property, this can be a risk to the ownership of your home. If this is an option you’re seriously considering, here are some basics to know before deciding to on this route.

Be Prepared For Higher Rates

You may be use to the steadiness and consistency of the fixed rate on your first mortgage, but the rates associated with a second mortgage will likely be higher. Because, in the event of default, the first loan on a mortgage will be paid first, lenders for a second mortgage will charge higher rates and fees to validate the elevated risk they’re taking on. While there are lenders that can offer competitive rates, you’ll need to do your research to find one that works for you.

Private Lenders May Offer More Solutions

If you cannot go through your initial mortgage lender in order to secure a second mortgage, you may want to consider a private lending professional who may be able to provide a better solution for you. Because private lenders are not working within the constraints of a larger institution, their guidelines for documentation and qualification may be a little less stringent. While they may have their own set of guidelines for providing a second mortgage, it can be a better way to go.

Is A Second Mortgage Necessary?

In order to obtain a second mortgage, it’s important to be aware that you should have enough equity in your home to make the loan worthwhile. Because you will only be able to refinance 80% of your home’s value, it may not be worth the higher rates you’ll be paying if you’ve only been paying into your home for a short time. Before deciding if a second mortgage is right for you, make sure you consult with a professional to determine the best choice for you.

There are a number of reasons that home buyers consider a second mortgage, from making large-scale home renovations to getting rid of overriding debt, but it’s important to consider if this option will work for you before moving forward. If you’re thinking about a second mortgage, contact your local mortgage professional for more information.

Spread the Love!

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage, Second Mortgages

Our Team


Kay MonigoldKay Monigold
Owner/Mortgage Broker/Residential Mortgage Loan Originator

NMLS#1086176
 
ron martinRon Martin
Residential Mortgage Loan Originator

NMLS#316821

Steven
Steven P Lowe, Sr
Residential Mortgage Loan Originator

NMLS #1085638
GET A RATE QUOTE →
Download Our Mobile App! →

Connect with Me!

Let’s Keep In Touch!

  • This field is for validation purposes and should be left unchanged.

Browse Articles by Category

Accessibility Statement

We are committed to ensuring that its website is accessible to people with disabilities. All the pages on our website will meet W3C WAI's Web Content Accessibility Guidelines 2.0, Level A conformance. Website Accessibility Policy
nmlsconsumeraccess.org
Equal Housing Lender

Quick Links

  • Privacy Policy
  • Get a Rate Quote!
  • Accessibility Statement
  • Texas Complaint and Recovery Fund Notice

Copyright © 2023 · Powered by MySMARTblog