When you have a first mortgage in place and you’re making regular monthly payments on that loan, you might still require additional financing for your home. In this case, you can choose a common solution: a second mortgage.
Duggal Mortgages is a second mortgage service provider in Canada, that will help you decide if an additional mortgage is a right choice for you. If so, we will carefully consider your financial circumstances and recommend the best lenders and loan conditions that fit your needs and long-term plans.
Contact Us to schedule a free consultation to hear about your options for a new loan.
What is a second mortgage?
When a homeowner has available equity in their property, meaning they have repaid a certain percentage of their first mortgage, they are eligible for a second mortgage as another means of financing. With a second mortgage, the property owner’s home is used as security for the lender, who requires assurance that the borrower is capable of repaying both loans.
The new mortgage does not remove or modify the terms of a homebuyer’s first mortgage. And if the borrower defaults or fails to pay the either mortgage, the first mortgage must be paid before the second.
A second mortgage can be a home equity loan, which means it will have a lower interest rate than a credit card or another loan.
What is the purpose of a second mortgage?
When a homeowner chooses a second mortgage, the money provided by the lender can be used for a wide range of home-related improvements, including home additions, improvements and repairs. The funds may also be used to pay for expenses that are unrelated to the home, such as paying off car loans and high interest credit cards.
Is a second mortgage right for me?
A second mortgage isn’t the right solution for all homeowners. For example, if you’re considering an additional mortgage, think about the amount of equity you have in the property. If you don’t have enough equity in your home, you’re unlikely to be approved for a new loan.
Also, before assuming a second mortgage, keep in mind that payments will increase your monthly expenditures. If the additional mortgage fits into your monthly budget, and you’re most likely able to make the payments for the duration of the repayment schedule, potential lenders are far more likely to approve the loan.
Adding a new loan to your financial situation is an important decision that requires careful consideration and expert advice. If you’re unable to repay the loan, or if you miss payments, you can place your homeownership and financial circumstances in jeopardy.
Don’t take the risk of making a serious decision without guidance from an expert second mortgage broker. We will gladly review your financial situation to help you decide if a second mortgage is right for you. If so, we will research potential lenders to find the right second mortgage company and explain your options for a new loan.
Contact Us today and start exploring your options for a second mortgage.
