If you have lived in your property for some time now and you have paid off a considerable amount of the mortgage or maybe you have paid it off in full, then there may be some changes that you want to make around your home with regards to a lack of space or just more comfort in your life. You may have dreams and aspirations of what you want your home to look like, but if you don’t have the necessary finance available then it makes doing what you want to do incredibly difficult. It’s likely that you’re going to need a particularly large sum of money and at the moment, you’re not sure where you can get it.
The answer may lie with your second mortgage lenders because they will allow you to use the current equity that you have in your home as a backup for the loan that you are putting up against it. In case you’re not sure what the equity is on your current property then it is the difference between what is owed on your current mortgage and what the property is worth at the moment. It’s probably been some time since you took out your first mortgage and the thing to remember here is that the procedure is very similar. If you are a little bit unsure if this is the right kind of loan for you and your current circumstances then maybe the following benefits of taking out a second mortgage can help you to make a more informed decision.
- You can borrow more – It is just is that you can borrow could when you to guide your first mortgage application many years ago. Back then, they generally will only lend you about 80% of the property’s value and so you had to come up with a 20% deposit before the lending institution will even entertain the thought of lending you the money. The good news this time is that you can borrow more money and as much is 90% of your home’s equity can be gotten.
- Enjoy lower interest rates – If you have been wanting to make changes to your property for some time now then it’s likely that you probably considered other types of loans and maybe even using your credit card to get the money. The good news is that taking on a second mortgage offers you much lower interest rates than these options.
The money that is loaned to you as part of your second mortgage can be spent how you want and so you’re lending institution will not be telling you exactly what you can spend it on.