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Second Mortgage Info
We Help You To Make A Wise Decision
At Toronto Mortgage Brokerage we do not pressure you into making a decision so that we can earn off of you. Being our valued customer, we hold your best intentions when advising you and making changes. A second mortgage is a serious decision and should be made wisely. By working with us, you will also get the lowest possible rate for your second mortgage and you won’t be charged with ridiculous fees like you will be at some of our competitors. Depending on the amount that you need and for the time that you need for, we will create a unique solution for you. Contact us today to discuss getting your second mortgage..
Second Mortgage Benefits
People get a second mortgage or even third, typically to consolidate debt without disrupting their first mortgage. There are many of other reasons however as well. The main benefit is that a second mortgage can become a fantastic source for additional money to flood in. Nonetheless this second mortgage will have to be paid off eventually. Before any funds go to paying off the second mortgage, the first loan would need to be taken care of completely.
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Reasons to Get a 2nd Mortgage:
We Make You Aware Of Pros & Cons
If you are in need of extra cash and feel that a second mortgage is the way to go then let us help you at Toronto Mortgage Brokerage to go through the process of getting it correctly. You have to keep in mind that there are risks involved as with any loans and because of that it is very important to turn to a reliable professional.
We Educate You About The Options You Have
If you have already paid off a portion of your home and/ or the market value of the home had risen then you are especially a good candidate for a second mortgage. Even if this is not the case for your situation, then there are still options that we can provide for you.
Frequently Asked Questions
How Does a Second Mortgage Work?
Superficially, a second mortgage works much like a first one. You will borrow a sum of money from a lender based on the value of your home. You will then need to repay this principal amount, along with the interest, over a set period of time. The difference is that you will now effectively be being off two mortgages on the same home that may or may not be of equal value.
Another difference is that should anything happen that causes you to become unable to pay off your mortgage and the bank takes possession of your home, the first lender will be compensated first. Only if anything is left will the second lender be compensated. This is why requirements are often stricter on second mortgages and the rates are higher.
Why Get a Second Mortgage?
Is there anything that costs a large amount of money that you want to buy but you just don’t have the money on hand? Yes, you could also buy it on credit. However, large purchases like a boat, a new car, or that massive renovation project may not be available on credit or the interest rates can be much higher than compared to a mortgage from a bank or lender.
If you are in this situation, getting a second mortgage on your home might be the best option. Your interest rate payment will be slightly higher than your first mortgage but should still be better than buying on credit, opening a line of credit, or a vehicle/chattel loan. As your home is a “fixed asset”, you also know that your collateral is safe and sound as long as you can keep up your payments.
How do I Qualify for a Second Mortgage?
The process to apply for a second mortgage will be very similar to applying for a first mortgage and any broker or lender might offer a second mortgage. However, there are usually fewer lenders willing to do so as not everyone is equally risk-tolerant.
The requirements for a second mortgage will also be higher than for your first mortgage. Because you already have a mortgage to your name, your debt-to-income ratio will naturally be higher from the onset.
The following factors will play a big role:
- Credit score: You will need a good credit score that’s at least 600 but preferably between 700-900 for most lenders.
- Equity: This refers to the amount of your home’s value that’s technically no longer mortgaged. The closer you are to fully owning your home and amortizing your mortgage, the better.
- Income: Lenders will be even stricter on a stable source of income that’s sufficient to cover your debts for the foreseeable future.
Let Us Help You Secure Your Second Mortgage
With a wide range of products, a client-focused mentality that aims to get you the best solution, and highly knowledgeable experts – we’re in the ideal position to help you secure the best second mortgage.