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Second Mortgages in Burlington to Maximize Home Equity

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A second mortgage is a loan taken after the first mortgage that allows homeowners to borrow money from the equity in their home, without refinancing their current mortgage. There can be various reasons to take out a second mortgage, such as:
  • Consolidating debts;
  • Financing home improvements;
  • Education;
  • Second property.
The second mortgage, secured with the same assets as the first, usually carries a higher rate of interest that the first mortgage. The amount that can be borrowed is based on the equity in the home, which is the difference between the current value of the home and the amount that is owed on the mortgage.
 
One of the most attractive feature of second mortgages in Burlington is that lenders often will overlook blemished credit and unique property types, as long as there is sufficient equity in the property being used as security.
 

How to Qualify for a Second Mortgage

 
When you build up equity in your home, it is one of the most secure financial bases available. Home equity is independent of your:
  • Job security;
  • Income qualifications;
  • Overall cash flow.
A second mortgage is easier to qualify for than unsecured loans, and because it is based on home equity, the interest rates available will be much lower than unsecured debt.
 
To qualify for a second mortgage you must have more than 15 per cent in your home and must be able to pay for the mortgage without exceeding your total debt service ratio. The Canadian Association of Accredited Mortgage Professionals offers mortgage calculators here to get a sense of the cost of payments.
 

A Safer Option

 
Rather than re-mortgaging your home or taking out a home equity line of credit, a second mortgage is much safer. With lower rates than unsecured lines of credit, repayment is faster, which enables better management of high interest debts. Interest rates involved in second mortgages can still be much lower than those offered by other financial products, such as credit cards. This is why it can be possible to refinance your existing credit card debt by paying it off using a second mortgage.
 
It makes more sense to use a second mortgage over an unsecured line of credit.  A second mortgage is easier to pay off, since it will have a lower interest rate than an unsecured line of credit, and if you use the money to consolidate your debt, or invest in home renovations that will increase the value of your property, it will help you find cash when you need it.
 

Second Mortgage Solutions in Burlington

 
Many homeowners have discovered the benefits of second mortgage solutions in Burlington. Second mortgages can require less documentation and paperwork than other loan types. This makes it possible to get your hands on the loan proceeds quickly. This is important when time is of the essence. For example, you may need access to funds right away because a great investment opportunity has become available which won’t be around for long.
 
Second mortgages provide homeowners with financial solutions that offer great benefits. 

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