Website Articles

June 24 2006

2nd Mortgage - Better Than Refinancing

You have probably received refinancing offers in the mail or advertised online touting your ability to pull out your home’s equity. But a 2nd mortgage, also called an equity loan, may be a better financing option than refinancing your mortgage. 2nd mortgages are ideal when you just want to tap into your equity, plan to move soon, or are unsure about the amount you want to borrow.

Tapping Your Equity

Tapping into your home’s equity is best done through a 2nd mortgage if you already have a low interest loan. Typically, applying for a 2nd mortgage requires fewer fees than refinancing a mortgage. 2nd mortgages are also paid back sooner, so your interest payments are less.

Short-Term Loan

With the costs involved in refinancing, you typically need to keep the loan for about two years to break even. However, with a 2nd mortgage you don’t have those fees to worry about recovering. 2nd mortgages do have minimum balance and early pay off fees, but they are significantly less than refinancing fees.

Flexible Loan Amount

A 2nd mortgage allows you to take out your home’s equity over the course of several years. The money can be accessed with a check, ATM card, or direct deposit, depending on how you set up your account with the lender. Additionally, you only pay interest on the money that you have withdrawn.

Higher Approval

Lenders tend to be more lenient with approving 2nd mortgages. Since the amount usually is less than a traditional loan, lenders remain confident that they will receive payment. If you have had a few credit glitches in the past two years, think about going with a 2nd mortgage.

2nd Mortgage Mistakes

2nd mortgages aren’t for everyone. You should weigh the cost of PMI and payments when choosing your financing options. Borrowing more than 80% of your home’s value will subject you to private mortgage insurance.

Your monthly payments should also be a factor in your decision. By taking out equity when refinancing your home, you will have a lower payment than if you had both a mortgage and 2nd mortgage payment. Also, if you refinance in the future, you will have to pay off your 2nd mortgage.


Apply for a loan now!

Back to Main Articles Page

Articles

24/06/06

11 Deadly Mistakes When Applying for a Mortgage

11 Deadly Mistakes When Applying for a Mortgage ...

24/06/06

2nd Mortgage - Better Than Refinancing

You have probably received refinancing offers in the mail or advertised online touting your ability to pull out your home’s equity. But a 2nd mortgage, also called an equity loan, may be a better financing option than refinancing your mortgage. 2nd mortgages ...

24/06/06

2nd Mortgage Loan After Bankruptcy - Get Approved Online

A 2nd mortgage loan after a bankruptcy is possible in as little as two years. Refinancing your mortgage can help you make needed home improvements or pay off high interest debt. Refinancing with adverse credit history requires savvy shopping on your part to ...

24/06/06

4 things to watch out for when choosing a mortgage company

We all know that there are a lot of mortgage companies out there. But how do you know which company to choose? Some companies have flashy advertisements about low interest rates, but are they really the best company to choose? A mortgage is a very large investment, ...

24/06/06

40-Year Mortgages: An Alternative to Interest-only Loans?

Interest-only loans are quickly becoming a mainstream loan product. Borrowers who were initially turned-off by the perceived risk associated with an “interest-only” loan are now starting to see the benefits: Lower payments, less money tied up in equity, more ...

24/06/06

5 criteria to get your Home Loan Mortgage approved

Why do some people get their home loan mortgages approved in a breeze while others struggle through with hiccups? What are the differentiating factors between one application and another? What do lenders look at when they evaluate you? ...

24/06/06

5 Things In Selecting The Best Mortgage - You Should Know

Your goal is not only to find the best rates and programs, by searching through a huge number of lenders products, and save yourself thousands of dollars on mortgage payments every year, but also, to save time and hassle by simplifying the loan process ...

24/06/06

6 Helpful Tips On Mortgage Financing

Here are some mortgage tips that can help you obtain a mortgage with less hassle, and at a lower overall cost: ...

24/06/06

7 Reasons to Choose a Mortgage Broker over On-Line Lenders

1. Personal Advice: Breakwater Mortgage Corporation calls Hampton Roads and the surrounding communities (Norfolk, Suffolk, Chesapeake and Portsmouth) home and an on-line lender could be located anywhere. Breakwater Mortgage Corp. is located in Virginia Beach ...

24/06/06

97% Of American Homeowners Overpay Their Lender In Mortgage Interest Every Month.

97% Of American Homeowners Overpay Their Lender In Mortgage Interest Every Month. ...

See all articles

Current Rates