Understanding Second Mortgage Loans

Second Mortgage Loans

Second mortgage loans can provide a valuable source of money that can be used in a number of different ways.  Do you have debt that you would like to consolidate? Or perhaps you have a child that is going off to college, or you have a home renovation that you would like to complete? Second mortgage loans allow you to take advantage of the home equity that you have built up.  Home equity will increase as the value of the home increases and as the amount of the first mortgage decreases.
For mortgage lenders, a second mortgage is considered more of a risk than a first mortgage.  This is due to the order of the mortgages. In the case of a mortgage default, the proceeds are used to pay the remaining amount on the first mortgage with the remainder going towards any second mortgage amounts.  As a result, mortgage lenders typically charge higher interest rates for second mortgage loans to compensate for the increased risk associated with them. Despite the higher mortgage rates, a second mortgage is still a viable option for many homeowners who want to take advantage of the equity in their homes.

Finding the Right Second Mortgage for Your Needs

The benefits of second mortgage loans are maximized when you find a mortgage lender with the lowest possible mortgage rates.  It is also important to consider any closing fees that can lead to unexpected costs.
Take the time to find a mortgage specialist that will provide professional advice based on your unique financial situation.  In the case that you are not a good candidate for a second mortgage loan, an experienced mortgage specialist will be able to customize a mortgage plan to meet your specific needs.  Regardless of what mortgage option you choose to pursue, find a mortgage specialist with access to a large and diverse network of lenders in order to secure the best possible mortgage rates. 


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