When Should You Apply For A Second Mortgage?
Are you considering applying for a second mortgage? Not sure whether you should take the plunge? Then read on to know more about applying for second mortgages. The second mortgage is a mortgage refinancing option. People opt for a second mortgage for a variety of reasons. Some of them are:
To Avoid Paying Property Mortgage Insurance for their first Mortgage
Usually, people are asked to make a down payment of 20% on their first mortgage. If they end up paying lesser than 20%, then they have to pay a property mortgage insurance (PMI). There are times when the property mortgage insurance on the first mortgage is too expensive. That’s when people opt for a second mortgage from a different broker at a lower rate. This then helps them finance their first mortgage.
To Consolidate your Debts
Another common reason for taking second mortgage is to consolidate higher interest debts into a single lower interest payment. This is helpful for people struggling with their finances. They get to club all their debt payments into a single payment. This gives people some breathing room when they are caught up with multiple debt payments.
To Cover a Portion of your Down Payment for the First Mortgage
Most Edmonton mortgage brokers ask for a 20% down payment. This is basically 20% of the property value which is at times a hefty amount. People tend to opt for refinancing options such as a HELOC or a private second mortgage to be able to make their down payment for the first mortgage. If the first mortgage was taken to buy a new home, then an HELOC is the best refinancing option.
For Financing Your Home Improvement Plan
Your new home construction mortgage can have an amortization period from anywhere between 4 years to 30 years. In that case, even after a couple of years after staying in your house, you will still be making your mortgage payments. So, if you plan for a home improvement plan, going for a private second mortgage can be a good solution.
Very few Edmonton mortgage brokers offer second mortgage. But at Ratedeals.ca we offer many refinancing options which include, private mortgage, sub-prime mortgage, HELOC and second mortgage. With our strong network of lenders, we can offer you a private second mortgage in Edmonton for the best possible rates. Reach out to our mortgage specialists to know more about applying for a second mortgage.