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The Financial Flexibility of 2nd Mortgages in Burlington

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Many homeowners have been making their mortgage payments for years, but may be unaware of the equity they have built up in their homes. Homeowners can tap into this equity, giving them greater financial freedom and security by taking out a 2nd mortgage on their home. Second mortgages give Brampton homeowners the ability to consolidate their debt, finance large-scale expenses, and even purchase additional homes. This is the type of loan you use when you require large amounts of money. Of course, it is important for homeowners to be cautious when allocating the money. Remember, when securing a second mortgage, you are placing your home at risk. Failure to make your mortgage payments could result in the foreclosure and loss of your home.

2nd Mortgages vs. Credit Cards

Many homeowners choose to use credit cards to fund their large-scale purchases. Borrowing money from a credit card company often comes along with high interest rates, sometimes upwards of 20%. The interest rates that homeowners receive on their second mortgage are usually much lower than this, making it a great alternative for financing expensive home-renovation projects. The interest that you pay on your second mortgage is also tax deductible, providing further benefit to homeowners who choose this route. Homeowners often use 2nd mortgages to consolidate their credit card debts into one simple monthly payment, at a lower interest rate. This can help leave money in your bank account in the short term while saving you money in interest over the long term.

What Can I Use My 2nd Mortgage For?

The loan that you secure against your home can be used for anything you desire. It is important to consider the risk involved in taking out a second mortgage. Is the intended use of the funds worth the risk? Securing a second mortgage can be a lower cost financing alternative for many things, including home-renovation projects, pursuing investment opportunities, or sending your kids off to school. No matter what your intended use, your second mortgage gives you the financial flexibility of having a little bit of extra cash on hand. Here are some ways homeowners are using second mortgages to their advantage:
  • Home improvement projects
  • Debt consolidation
  • Purchasing additional homes
  • Paying off tax arrears
  • Funding home businesses
Securing a second mortgage is a considerable risk, one that homeowners need to feel comfortable taking on. Homeowners should have a steady and reliable income to ensure that the payments can be made, even as fluctuations in the interest rate begin to take effect. Much like credit cards, your second mortgage will have a predetermined spending limit; however, homeowners still need to put provisions in place to prevent frivolous spending.
Homeowners have used second mortgages to finance all types of home renovation projects, personal goals, and investment opportunities. Therefore, 2nd mortgages give Brampton homeowners the flexibility to pursue owning additional homes as well. Homeowners can take out a second mortgage on their home to help finance a down payment on a second property. No matter how you choose to use the additional funds, securing a second mortgage is not a difficult process. Contact your mortgage specialist today to learn more. 


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