A second mortgage, as the name indicates, is an additional loan that you take on your house with the help of a different lender, a house that already has an existing mortgage to begin with. While you start making payments on your second mortgage, you must remember that you are required to keep continuing making payments on your primary mortgage as well. The amount that you can borrow under your second mortgage is dependent on the equity that you enjoy on your home. Your home equity is dependent on the value of your home and the remaining balance that is still left to be paid under your primary mortgage. The difference between the two is your home’s equity. The maximum amount that you can loan under your first and second mortgages can be as high as 80% of the value of your home.
Some of the advantages of taking a second mortgage include:
- You are not required to discharge the low-rate first mortgage that you currently hold and have to pay fees or penalties.
- Owing to the fact that there are various providers of second mortgages, including institutional and private lenders, securing a second mortgage is much easier, when compared to the other option that you have, HELOC.
- Most of the second mortgages in the Canadian market have one-year terms and include interest-only payments.
- As much as 80% of the appraised value of your home can be utilized in order to secure a second mortgage. This value would of course deduct the unpaid balance that is left on your first mortgage.
However, you need to be careful regarding the various eligibility criterions and legal complexities that securing a second mortgage implies. Hiring a professional who can assist you in this matter is the wisest decision to take if you do not want to incur unnecessary losses. Choose our services at Best Capital Bonds to avail the best services related to second mortgages in Alberta, Canada. With many years of experience under our belt, we promise to provide you with incredible services and deep insight when it comes to your second mortgage. Get in touch with us at the earliest to start enjoying the benefits of a second mortgage.