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Why Secure a Second Mortgage for My Waterloo Home?

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For most homeowners, their home is not only the place in which they live, but it is also their most powerful financial asset. You may have already used your first mortgage to purchase your home; perhaps you’re even in the process of paying it off. Much like the loan that was used to purchase your home, second mortgages are loans taken out against the equity of your home. Securing a second mortgage has become a popular financing solution for Waterloo homeowners looking to consolidate their debt, fund a large-scale expense, or simply get quick access to cash. Second mortgages, or home equity lines of credit, give homeowners the financial flexibility to pursue other opportunities, for which they might not have had the disposable income to pursue otherwise.

 
How Many Mortgages Can a Property Have?

 

It is possible for a property to have many mortgages on it, so long as there is enough equity to support it. The rank of the mortgage is determined by the order of the date on which the homeowner borrowed the money. Though it is possible to have more than two mortgages, it is increasingly rare.

 

Why Would I Want to Refinance My Home?

 

Lower Interest Rates

 

There are instances where homeowners who are considering a second mortgage can actually secure a lower interest rate than on their original mortgage. Since interest rates fluctuate over time, there are times when securing a second mortgage makes sense financially for the homeowner. It can potentially save you thousands of dollars in interest alone. Sometimes it is advantageous for homeowners to break out of their first mortgage, even after incurring the penalty. Contact a mortgage advisor to help find the best solution for you.

 

Consolidate Debt

 

Home equity lines of credit usually have an interest rate that is much lower than borrowing from your typical credit card. This makes it an attractive alternative to help homeowners control and consolidate their debts. If you have money owing at various high interest rates with different companies, it might be in your best interest to secure a second mortgage to consolidate your debt. You will be able to control your debt under one low interest rate while only having to take care of one simple payment at month’s end.

 

Finance Large Expense

 

Many homeowners choose to refinance their homes to help fund any number of large-scale expenses, including home renovations, a personal business venture, or even their children’s tuition. Given that the interest is quite low, it gives homeowners the financial flexibility to borrow money when they need it, without having to worry about managing their day-to-day disposable income.

 

Emergency Situations

 

We are all faced with unforeseen or uncontrollable circumstances that come our way. These emergency situations can bring unexpected financial burdens that can put an unnecessary stress on your bank account. A second mortgage gives Waterloo homeowners quick access to cash that can be used to comfortably handle any myriad of unexpected events. It is good to know that you have some assurance and financial flexibility in case anything was to happen. 

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