10 Things You Must Know About Second Mortgage in Canada

Getting a second mortgage in Canada is not just becoming more popular, it might also become the norm in the years to come. Whether or not you’re planning to get a second mortgage in the future, now is the best time to familiarise yourself about some details so you can make the right decision in the future.

Second Mortgages Come in Many Forms

Basically speaking, loan products that use home equity can be considered a second mortgage. Notable examples are HELOCs and home equity loans. The type of second mortgage that you have to apply for is the one that fits your needs and ability to pay.

A Second Mortgage Uses Your Own Money

When you apply for a second mortgage, you are basically applying for a ‘loan’ that uses your own money. You have to be careful though, as tapping your home equity means placing your home on the line if repayment does not go as planned.

Private Lenders May Be Better Than Banks

For most people, qualifying for a second mortgage from a bank is near impossible, but private lenders often have looser qualifications that make it easier for those who are self-employed or those with bad credit to qualify.

Second Mortgages Are Used for Huge Expenses

Because this type of mortgage gives the homeowner access to their home equity, second mortgages are often used for debt consolidation and for paying for home renovation. This is to take advantage of the lower interest rate that second mortgages have compared to most other loans.

You Can Borrow A Lot or Borrow As Little As You Need

Different loan products have varying minimum loanable amount and maximum limit. When you qualify, you may borrow as little as you need or as much as you want within these parameters. Go for a HELOC for smaller recurrent loans or apply for a home equity loan to access a lump sum of funds.

Interest-Only Payments Are Possible

Some types of second mortgages allow for interest-only payments, making them easier to handle for your wallet.

A Second Mortgage Can Be Used for Anything

Once your loan is approved, you can use it for almost anything! Some people use it to finance a business, some to pay for home improvement, some for expensive university education, some for a dream car or vacation, and some to buy another property. As long as you pay within the terms, you can use your loan any way you want.

It Is Not Free

Aside from the interest rate, second mortgages come with fees. These fees may vary from lender to lender so be sure to talk about this detail with your mortgage professional.

Interest Rate Varies A Lot

Just as the fees vary from one lender to another, the terms and interest rates vary as well. A mortgage professional can help you compare interest rates between lenders so you can save some money too.

You Can Repair Bad Credit with A Second Mortgage

By using a second mortgage to consolidate loans, you can pay off other loans while getting lower interest that will be easier for you to pay off as well.  As you do this, your credit score will repair itself soon enough.

Thinking of applying for a second mortgage? Contact us at Mortgage Central if you have mortgage questions!

8 Features That Can Make Your House Surprisingly Harder to Sell

We usually think that the more features a house has and the more amenities are nearby, the easier it would be to sell the house later on, right? Well, the thing is, the features and amenities you like may be the exact opposite of what others prefer. Here are some of the most common features and amenities that are unappealing to some home buyers to help you in deciding your purchase and set your expectations if you are selling.

A Busy Location

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Some love the convenience of having stores, restaurants, and cafes just outside the door but some prefer a more quiet and ‘slow’ location. Know too that homes on busy streets usually have less value compared to a similar home in an interior street. This is something to think over if you’re buying now.

The Size of Your Yard

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Some people just don’t want anything to do with maintaining a yard, period. Some won’t want to move in unless the yard is big enough for big parties or to provide a substantial distance away from the neighbours.. It’s just near impossible to find the perfect balance.

Bedroom Location

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This is a big factor when purchasing a home. There are people who would balk out of buying a beautiful dream home just because one of the bedrooms is downstairs. The stakes go higher when it is the master’s bedroom that is in an unusual location, such as next to the kitchen. Generally speaking though, those in their senior years or near retirement usually want a one story home or for the bedrooms to be downstairs.

A School Just a Few Steps Away

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Having a school practically next door is heaven-sent for some but the very definition of a nightmare for other people. You may love the idea of walking your children to school but for someone who has no children, the idea of having children coming and going on the street right next to their house isn’t something they’d want. Not to mention the school buses and vehicles of parents dropping off and picking up kids for most of the year.

Fancy Renovations

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A granite kitchen or beautifully landscaped lawn can make buyers think that a home is a pain to maintain, more so if not situated in an affluent neighbourhood.

Having Tile Flooring

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Let’s face it, tile flooring isn’t the easiest to maintain. They are also difficult to remove, replace, and/or repair. Note too that tile patterns you love might be off-putting for some people. Hardwood is often the safest bet.

Having a Swimming Pool

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A swimming pool might be something you’ve always dreamed of having but someone who hates swimming or don’t want the cost of maintaining a pool will definitely not be into it. You may even have to take a loss when it’s time to sell a home that has a pool.

A Deck or A Patio

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It all boils down to maintenance being an issue. If you love being out in the yard while still being comfortable then, having a patio or a deck is something you love, but some would think that having them is just an inconvenience that they will be forced to take when buying a home. Just like having a pool, this might shave a few thousands off your home’s selling price.

With spring still more than a season away, selling your Oakville home may not be as easy more so in the upcoming weeks and months. Let our outstanding agents help you! Contact us today!