There’s something that you would like to do. Perhaps it’s consolidating some of your debt or it’s time to install a new roof. Whatever you have in mind, the decision to obtain a second mortgage will provide the funds that are needed. Since you’ve never tried this method of financing before, how will it work? Do you even qualify for a second mortgage? Here is some information that will help.
Only a Percentage of Your Equity Can Be Used
The lender will likely look closely at the amount of equity you have in your home. That’s because there’s already a mortgage in place and it will always take precedence over the second one. The goal is to ensure that even if you default on the primary mortgage and the home is repossessed, there will likely be enough left to settle the second mortgage once the property is sold.
You May Have More Than One Source of Income
Lenders will always consider income from a job when going over a loan application. You’ll find that many lenders who offer second mortgages also accept other forms of income as well. It may be money you receive from a trust fund, interest from some sort of investment account, or money from any type of retirement plan, pension, or governmental program. The cumulative amount of income you receive every month could be enough to meet the lender’s minimum requirement and advance your application to the next level.
Perfect Credit is Not Required
Some people think that they must have perfect credit in order to qualify for a second mortgage. That’s not the case. There are lenders who will offer second as well as first Mississauga bad credit mortgages based on the applicant’s circumstances. All you have to do is find them.
Essentially, if you have enough income to make the payments, there’s a good chance of being approved. Many bad credit lenders pay less attention to what happened in the last year or so than what was going on three or four years ago. If you’re currently up to date on your obligations and seem to have enough income to continue paying all your bills on time, the odds of being approved are quite good.
Reverse Mortgage for Seniors
If you are a senior citizen age 60 to an older and are having difficulties qualifying for a second mortgage you may find relief under the federally-insured home equity conversion mortgage a unique program established in 1998 that allows for older Americans to borrow from their homes Equity at reasonable interest rates with an added bonus, the ability to deferred interest payments until Your home is later sold. To get an idea of how much money you may qualify for try the free calculator at reversemortgage reviews.org
And Interest Rates Will Vary
You can expect the interest rates to vary from one lender to the next. Your credit score and history have some bearing on what those rates will be. Homeowners with higher scores can look forward to being offered lower rates.
That doesn’t mean someone with poor credit has to settle for any rate that’s offered. Shopping around is likely to uncover at least one or two other lenders who offer more competitive rates. By choosing to check with more than a single lender, you increase the odds of locating and locking in the best possible terms and rates for your second mortgage.
What could you do with the money from a second mortgage? Would it help you make essential upgrades to the home? Could the money allow you to strengthen your financial position or help you improve your credit score? Choose wisely and you’ll end up benefiting from that second mortgage in more ways than one.