There are various mortgage products that people in Brampton can use to get some extra cash. One such product is a second mortgage.
What is a Second Mortgage?
A second mortgage is a loan that uses the equity in your home as collateral. People who get second mortgages can typically receive up to 80% of the equity they have in their home – that is the value of their home minus what they still owe on it.
The cash that homeowners get from a second mortgage may be used for any purpose but common reasons for getting a second mortgage include debt consolidation, financing a large home improvement project, or start-up capital for a business.
How Does a Second Mortgage Work?
Most second mortgages are short term – only one or two years. Usually, the homeowner will have the option to pay interest-only during the term of the second mortgage, and at the end of the term, they will have the option either to pay off the second mortgage in full or to renew or extend the second mortgage.
The interest on second mortgages tends to be higher than the interest rates on first mortgages simply because lenders consider second mortgages to be riskier. Nevertheless, the interest rates on second mortgages are still considerably less than other types of loans such as credit cards.
How Can I Qualify for a Second Mortgage?
One of the best things about second mortgages is that they are fairly easy to qualify for. You don’t have to have a lot of money in the bank or even great credit for that matter. The only real requirement is that you have sufficient equity in your home.
That being said, however, you should look at your finances and create a budget to ensure that you will have enough money to make the payments. Your mortgage broker can help you determine whether getting a second mortgage will be affordable for you.
How Do I Apply for a Second Mortgage in Brampton?
If you are a Brampton homeowner and are looking for a second mortgage, the best way to get one is through a mortgage broker. Mortgage brokers have access to dozens of lenders and they can do the shopping around for you to help ensure that you get the best possible interest rate and the terms that work best for you.
Contact Clarity Financial Today!
Are you interested in getting a second mortgage in Brampton, or would you like to learn more? If so, contact Clarity Financial today!