Perhaps it’s unsurprising for a homeowner to hear “second mortgage” and bristle. To many, the phrase is associated with money trouble, which is a dark situation to avoid.
However, life has always been expensive, and homeowners should rejoice to know they have a major asset they can draw on when times get tough. Here are a few reasons homeowners scared of surging interest rates and inflation should feel assuaged by second mortgages.
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All Credit, Debit, and Income Levels
People need money for a range of reasons. Maybe an investment opportunity came knocking, and the door isn’t open forever. Perhaps there’s a medical emergency or another pressing need.
Nobody should be barred from borrowing money for the crucial things in life because they’re currently suffering bad credit. Industry leaders make taking out a second mortgage easy, regardless of your income, credit, or debt levels.
They’ll work with you, understand your life goals and finances, then draw on their industry connections to pair you with a suitable second lender. There’s always recourse, but you need the right mortgage broker to help you find the right path.
Clients with no income can structure payments to match what they can afford. Some brokers even prepay the entire mortgage upfront, so the term has no monthly payments.
Quick Cash
Second mortgages tend to get quicker approvals than bank loans because you use your home as collateral. The longer you’ve owned the home, the more equity you build up, shortening the approval process.
When timing is everything, consider a second mortgage!
Maximize the Amount You Borrow
If you need to leverage a lot of money from your home, you need a mortgage broker who can secure the highest loan-to-value ratio possible. Most lenders only approve up to 80% loan-to-value (LTV), but there are second mortgage lenders who do 85% or even 90%.
To imagine how big an impact this extra five to ten percent can make, imagine getting to borrow an additional $50,000 or $100,000 on a $1 million home! There isn’t merely one universal thing called a “second mortgage.”
Speak to a mortgage broker near you, and don’t settle for terms that don’t accomplish your goals or meet your needs.
Multiple Purposes
Homeowners can do whatever they want inside their houses and are just as free when leveraging it. Using your home as collateral may be risky because failure to pay can result in you losing your home. However, not using your home as an asset when you badly need money may be risky, too.
Craft the terms carefully and take the obligation seriously. Typically, people use second mortgages for core reasons, such as improving their credit rating, reducing monthly payments, or home renovations that address a needed repair or boost its long-term value.
Once you understand how helpful a second mortgage can be, hopefully, you won’t be frightened by the term. Speak to your mortgage broker today to find the optimal way to leverage your home.
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