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By FinanceBuddy Staff Writer
A second mortgage is a new loan that is established after the first loan. This loan is smaller than your normal home loan. It is a loan that is usually taken against the equity of your home. For example, say that you have paid $95,000 on your home and would like to borrow against that money. You could do so through applying for what is called a second mortgage. There are many great companies to work with. It is usually best to attempt to get the second mortgage established with the initial company that you worked with to gain your original mortgage, but you do not have to go with the same company. You can check to see what other mortgage companies have to offer for the potential of a second loan. A second mortgage can be used for a number of things. For example; home repairs or renovations, paying off debt, potentially a vacation, how about a special engagement like a wedding or anniversary party. The uses of the monies received are up to you. Be aware that in many cases, interest rates on a second mortgage tend to be much higher. Another interesting fact about second mortgages is that they are usually written for shorter terms than the first. This is to help you pay it off more quickly. If you are interested in establishing a second mortgage, get a hold of your current lender, ask questions, for example, things like what the standard rates are, how long it takes to establish a second mortgage, how long after the mortgage is set does the first payment need to made. It is a good idea to make a list of all questions you can think of that you may need to ask of your lender. If you feel uncomfortable about any part of the situation, be sure to ask lots of questions, the lenders don't mind and want to make sure that you have a good understanding.