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Second Mortgages Help Kitchener Homeowners Meet Financial Goals

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Second mortgages in Kitchener can offer a cost-effective and quick means of accessing funds for major expenses. Taking out a second mortgage allows the homeowner to borrow against the equity of their home. Here are some reasons why more homeowners in Kitchener are taking out second mortgages.
 

Education

 
Rising costs of post-secondary education have led students and their parents look for alternative sources of funding. A second mortgage could allow for college or university education to be paid off at a low interest rate and within a more suitable time frame.
 

Home Renovations

 
Changes in personal circumstances such as a new addition to the family, might mean that you will need to upgrade your home. Renovations, home improvements and additions can add to the market value of your property – and a second mortgage may be the ideal tool to finance your project.
 

Buying a Second Home

 
Whether it’s a summer cottage or a winter chalet, owning a second home can be a reality with a second mortgage. With a second mortgage, there is no need to wait until you’ve saved a down payment for a second home investment, but you must have the funds and cash flow to comfortably make both mortgage payments.
 

Debt Consolidation

 
In some cases, homeowners may have committed to high interest bearing loans (personal loans, vehicle finance etc.). You could consider combining those various interest rates and payment dates by leveraging the residual value of your home to create a single amalgamated lien – which will most likely be available at a lower interest rate.
 

Benefits of Second Mortgages in Kitchener

 
Homeowners who take on second mortgages also enjoy tax benefits. The tax relief proves very useful when it comes to getting home loans since this allows you to better cope with the interest rates from their second mortgage loans. The same does not apply to accrued interest from credit card loans for example, which can snowball significantly over an extended period of time.
 
The amount you can borrow depends on a number of factors. The top consideration is how long you have owned your home and how much equity you have accumulated through your mortgage payments. Mortgage calculators can also help you identify how much you can afford. To qualify for a second mortgage you must have at least 15 per cent equity in your home and the lender will also look at:
  • Equity – The more equity you have, the less risk the lender faces;
  • Income – Steady income from which you can make your second mortgage payments;
  • Property – The marketability of your first home is factored by the lender. If you default on payments, your home will be sold.
For anyone that wants to take advantage of the net worth built up in their home, second mortgages are the logical solution. Rather than sit with your home equity tied up, you are able to take those funds and spend or invest them however you see fit.
 
There are many reasons why homeowners should consider refinancing their most important asset. Second mortgages in Kitchener help homeowners achieve their financial goals sooner. 

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