Are you considering the prospect of getting a second mortgage? Do you wish to learn more about the process? If yes, you should schedule a consultation session with a mortgage broker. 

A mortgage broker can guide you every step of the way. From informing you about the formalities of the process to helping you fill out the paperwork, these individuals can make the process extremely simple. 

In this article, we will review the following: 

• What is a second mortgage? 
• Reasons to consider a second mortgage
• Eligibility requirements 

What is a Second Mortgage?

A second mortgage is a loan that is secured while an original mortgage is still in effect. Over time, homeowners build up equity in their homes and can tap into some of this available equity by securing a second mortgage. 

The interest rate for the second mortgage is typically higher than that of the original mortgage as second mortgages are usually riskier for lenders. The approval process for second mortgages tends to be simpler and quicker than the process for original mortgages, especially when homeowners take advantage of assistance from mortgage brokers. 

Reasons to Consider a Second Mortgage 

 There are several reasons why you might need to take out another mortgage . Most individuals submit these applications to cover the cost of home renovation projects, pay off medical bills, settle debts with high interest rates, or pay for higher education. 

Some individuals may view second mortgages in a negative light, however, in many cases, homeowners can reap benefits after securing a second mortgage. For instance, if you get a second mortgage to carry out a home renovation, your property value would likely increase and put more money in your pocket at sale time. 

Similarly, if you take out a second mortgage to invest in your future or start a business, you can lay down the foundation for future success. Although the monthly payments are an added cost, the long-term rewards would make it worth the financial investment. 

Eligibility Requirements for a Second Mortgage 

To be approved for a second mortgage, you must meet specific criteria. It is advisable to schedule a consultation with a mortgage broker who can provide you with clear guidelines to navigate the process. 

The most common requirements to secure a second mortgage are as follows: 

• You must own property. 
• You must have high equity in your property. The amount of equity required does vary from lender to lender, however, most lenders prefer fifteen to twenty percent equity in your property.
• You must have a dependable and steady source of income. This requirement is important as the lending institutions need to ensure that you can meet your payments every month.
• Lastly, banks and other lending institutions also require applicants to have a good credit score. Credit scores provide an indication of your credit risk. If you have a good credit score, lending institutions believe that you are more likely to return the loan amount with interest.

Get in Touch

If you are thinking about getting a second mortgage, whether to get out of an adverse financial situation or to invest in your future, take the time to consult with a mortgage broker. An experienced professional can assess your financial situation and help you secure a second mortgage. 

EasyMortgageLend.com has a team of experienced brokers who can guide you every step of the way. To schedule a consultation, visit our website to fill out the contact form. You can also give us a call at 647-895-3921 to speak directly with one of our experts.