Second Mortgages in
Ontario
Living in Ontario and finding yourself in need of funds to finance an
upcoming renovation or to pay down existing debts? Taking out a
second mortgage on your home is a viable option for you and your
family! Second mortgages are a second loan on a property based on the equity
in your home and the current market value. They are often
given as a fixed amount and have a specific period of time in which they need
to be paid off - a period called a home equity term.
Uses for Second Mortgages
Second mortgages are often used for times when you need a lot of money quickly. Some of the more common situations are:
- Consolidating debt
- Covering home renovation costs
- Paying for a child's education
- Repaying mortgage and tax arrears
Advantages of a Second
Mortgage and Debt Consolidation
A
second mortgage can be advantageous in helping you and your family with large
financial burdens. Credit cards, unforeseen challenges and educational
debt can mean that you have multiple loans with varying interest rates.
Debt consolidation is the process of consolidating two or more sources
of debt into one amount. This enables the consumer to make one payment on the
entire amount owed, resulting in lower interest costs over time. A second mortgage helps with this as it provides a usually lower
interest rate and flexibility with your repayment schedule.
Qualifying for a Second Mortgage
If
you are interested in obtaining a second mortgage, you need to have:
- An existing mortgage
- Good credit
- More than 20% equity currently in your home
Things to be Aware of When Considering
a Second Mortgage
There
are a few items banks and lenders will look at when you apply for a second
mortgage. The first and most important is that you have enough equity built up
in your home to warrant the second loan. If you are seeking a larger amount than
your accrued equity, you might be declined or have to make changes to your
application. Your credit score will also be a factor when you apply for a second
mortgage; The higher your credit score is, the better the interest rate will be.
Looking
into second mortgages on your home in Cambridge, Ontario can be a logical way
to pay for home renovations, college tuition and consolidate your debt. If you are considering a second mortgage on your home, take time to contact
Canadalend and speak with one of our mortgage specialists today, to discuss your situation and your options moving forward.