Getting A Second Mortgage in 2022

Getting a second mortgage is something that you need to truly think about to decide on properly. After all, it is an additional loan that you’ll have to pay on top of your primary mortgage. Know that delayed payments for a second mortgage can mean losing one’s home plus there are always some additional fees that need to be paid which might mean additional financial strain on your budget.

The past few years brought historically low rates in the mortgage scene in Canada which caused an increase in home-buying activity as well as mortgage refinancing activity. Perhaps this is part of the reason why you are interested in getting a second mortgage now, but just know that there are plenty of things to consider before applying for one. We will talk about these things in this article.

Cost of A Second Mortgage

Applying for a second mortgage has certain fees. There will be costs associated with application fees and some costs which might be added by the lender or the institution from which you are planning to borrow from. There are also appraisal fees, closing costs, recording fees, underwriting fees, and other fees which are specific to your area. Note too that some lenders might charge a second position lien or an insurance fee for the extra risk they will be taking by lending to you.

Uses for A Second Mortgage

You can use the funds for a second mortgage for basically anything that needs a large amount of money. This can be a new business venture, a house renovation that you had been putting off, buying a second property, or pursuing higher education. You might also want to use a second mortgage for debt consolidation as a way to help you save thousands of dollars in interest from high-interest debts.

The key to using a second mortgage is to make sure that the benefits of getting one will outweigh the risks of taking it as a debt. You can consult with mortgage professionals to make sure that getting a second mortgage will be worth your effort, time, and money.

Alternatives for A Second Mortgage

There are other types of home loans that can help you access money from your home equity. A good alternative for a second mortgage is refinancing your home. Refinancing your mortgage will usually give you access to a lower amount of cash than a second mortgage. With this said, this still a better option than getting a personal loan which typically comes with high interest. You can talk with our mortgage professionals at Mortgage Central Canada to find other alternatives for getting a second mortgage.

Important Details to Consider

With everything said above, please take note that a second mortgage is still a type of home debt. It is still an additional financial burden that you need to pay on top of your primary mortgage and getting one can mean taking higher risks of losing your home. Additionally, other loan products such as the other types of second mortgages come with their own set of advantages and disadvantages. You need to assess your financial capability as well as your existing assets and liabilities to pick which loan product would be most beneficial for you.

If you’re thinking of getting a second mortgage in 2022, do not hesitate to contact us at Mortgage Central Canada. We remain open for both in-person and online transactions to meet your needs.

Is It Time to Leverage Your Home Equity?

If your homeowner with equity, you can cash in and start making equity in your home work for you with a home equity loan. After all, you’ve been saving for years, making your payments on time, isn’t it time you started getting something back? This kind of mortgage, also known as a second mortgage, can help you remodel your home, start a business, pay for retirement, or help you buy a new home. Under the current mortgage rules, you can burn up to 80% of your home’s worth; you may not actually borrow this much though! Here were going to talk about equity, how one of our Toronto mortgage brokers can help you, and if this is the right choice for you.

What Is a Home Equity Loan?

After years and years of payments, you’ve started building value in your home, and that’s equity. The less debt you owe on your home, the more equity you have. As Canada mortgage brokers we can help you unleash the power of your home’s hidden equity to get the money you need for your next project.

But before we talk about qualifying for a home equity loan we need to talk about loan-to-value ratios or LtV. No one will ever get 100% loan to value, even with the 720 or above credit score. You’re most likely to get between 60% and 80%, and you’ll only be able to borrow up to 80% of your home’s value – and that’s after they subtract whatever you still own it. This is why you to have as much equity available as possible.

Who Can Qualify for a Home Equity Loan?

If you have equity you can qualify for home equity loan – the trouble is finding the RIGHT but home equity loan. When you work with us as your Toronto mortgage broker you’ll understand what your real options are. We don’t work for the banks, we work for you, so you’ll know what you’re supposed to be getting. Credit, employment history, and payment history all play a role in your eligibility.

Understanding the Risks of Borrowing

Anytime you borrow against your home there will be risks. What we can do as mortgage brokers is mitigate those risks, helping you understand if now is the right time to get a second mortgage on your home. After all, what’s the point going through with it if you’re only going to end up losing your home?

Let Us Help You

Working with us will help you save time, money, sanity, most importantly your home. We’ll help you understand if your lender is on the up and up, you can find a better deal somewhere else, or if maybe you should just wait to borrow against your home. A little time can do a lot of things for your credit, and the better your credit is, the better your mortgage terms will be. Visit our home equity loans page today, and see how much you could save on your next mortgage!