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.

 

 

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.

 

 

If you are interested in obtaining a second mortgage, you need to have:

1. An existing mortgage
2. Good credit
3. 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.