Mike Hamel

Second Mortgage: Better Source Of Needed Cash

A second mortgage is a good way to pay for big-ticket items like home improvements, a college education, or debt consolidation. It has several advantages over other forms of credit:

A second mortgage is a mortgage taken out in “second position” on a property that already has a mortgage. A second mortgage will give you a fixed amount of money repayable over a fixed number of years.

Get better interest rates with a second mortgage

Second mortgages come with better interest rates than other types of loans. You can select either a fixed rate or an adjustable rate of interest. If you select a fixed-rate second mortgage and you stay in your home for several years, you’ll save money over an adjustable-rate loan if interest rates go up, which they usually do.

Lower monthly payments with a second mortgage

According to financial experts, debt consolidation is the second most popular reason homeowners take out second mortgages. Debt consolidation could leave you with a single monthly payment instead of a number of bills. This can decrease your monthly expenses and increase your cash flow.

Increase your home’s value with a second mortgage

Accessing the equity in your home is one way to pay for home improvements. But not all improvements are created equal. The best return-on-investment for your home improvement dollars are:

- Remodeled rooms - kitchens and bathrooms add the most value.

- Second-story addition - as long as it matches your home’s existing style.

- Family room addition or basement finish - increasing usable square footage is a good idea.

- Energy efficiency - new heating or cooling system, new windows or added insulation.

A remodeling rule of thumb suggested by The National Home Builders’ Association is to keep the total value of your home to no more than 15% above the median sales prices for homes in your area.

Get more second mortgage information, plus a no-risk loan quote at Simple-Mortgage-Refinancing. It will cost you nothing to see if a second mortgage could be a good financial move for you.

Article Tags: Second Mortgage, Interest Rates

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