For most homeowners, their home is not only
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.
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.
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.
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.