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Tuesday, March 19th, 2024

Reasons Why you Might Want a Second Mortgage – Ask a Vancouver Mortgage Broker

Reasons Why you Might Want a Second Mortgage

Adil Virani Vancouver Mortgage BrokerWithVancouvermortgage rates so low, now might be an ideal time to take out second mortgage.

When money is still cheap to borrow and you need a big chunk, you don’t have to max out those expensive credit cards, or get a more costly personal loan. If you own a home, and especially if you’ve owned for awhile, why not use your home equity instead?

What is home equity? Basically it’s what your home is worth now on the housing market less what you owe on the first mortgage. It simply refers to the value that you have built up in home from rising house prices, and what you’ve paid down on your first mortgage. You can borrow up to 80% of the amount on your home equity.

What can you us it for? Well, you should use it wisely and for something worthwhile. Since it is a second mortgage, you will want to use it for something beneficial. Make no mistake though; you will not get a second mortgage at the same low rates as your first mortgage. It will cost a bit more but not as much as you think.

Reasons for a Second Mortgage

1. Home Renovations – Have you been wanting to add on another room, or re-model the kitchen and/or bathroom, or even maybe do something with the basement? These types of projects can be very expensive and a second mortgage is an excellent way that many people use to finance them. Home renovations also have the added advantage of putting that money back into you pockets because they have an excellent return on your investment. They add value to your home.

2. Avoid Mortgage Insurance – If you’re buying your first home, and you are putting down less than 20% as a down payment, you will have to take out mortgage insurance. This is an added expense. Many people who don’t have the full 20% to put down on their homes are using a second mortgage to re-finance the difference to make up that 20% because it’s cheaper than paying for mortgage insurance.

3. Buy a Second Home – With interest rates so low, and real estate such a great investment, you might be thinking you’d like to buy a second home, or even that dream cottage in the mountains. A second mortgage can give you the money you need for that down payment to buy either of these investment options.

4. The Kid’s Tuition – Your young ones may have reached the age where they are ready to go to college or university. As we all know, education is important if you want to succeed out there, and it’s not cheap. Even with student loans, or a part-time job, it’s still tough to make ends meet, and maybe you’d like to given them a helping hand.

5. Debt Consolidation – Sometimes you spent just a little too freely with your credit cards. Maybe the car is starting to show its age and you find yourself just barely holding the fort together to pay for it all. If you approach it responsibly, you can use a second mortgage to pay off all those expensive interest rate credit cards, and use a second mortgage to get yourself sorted. The interest will be much cheaper and the monthly minimal you’ll have to be pay may give you a lot more breathing room to relax and enjoy life.

There are some great reason why a second mortgage can be well worth your while. If you need some advice about getting a second mortgage than give me a call because that’s what I do.



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