I got a mortgage from one of the local companies in Vancouver. At the time, I thought this was going to be enough to do much-needed home improvements on my new home but the costs and expenses increased and there was no cash left! Then I heard something that was new to me; second mortgages.
What is a Second Mortgage?
The first thing that you will need to understand is what exactly a second mortgage is. A second mortgage is a mortgage that is characterized by a loan secured against a current house or property. The loan that you took out first takes priority and has to be paid off before any more money goes into your second mortgage.
The reasons for you to consider getting a second mortgage.
- The reason why many people go for this type of mortgage is that they find themselves in a position where they need a lot of money but they are not able to acquire it from any other source. This was the situation I found myself in as my pad was in need of a facelift!
- The second reason why I needed the other mortgage was that I was avoiding acquiring a loan from private mortgage insurance because their terms did not work for my situation.
- Another great advantage that you will come across when you are dealing with second mortgages is that you will be able to secure a significantly larger amount of money. Other options like personal bank loans and credit cards will only offer a very limited amount so you will only be able to secure a small sum of money.
- Additionally, I considered getting the second mortgage because I found out that you can actually use the loan for anything you want. Different people use it for different reasons. For example, there are people who go for this type of mortgage option to use the cash for paying tuition for college, debt consolidation, and property investment among other things.
- It is much easier for you to secure this type of second mortgage loan because the mortgage lender will secure the loan against your current property. Other funding options have too much red tape which makes it harder to acquire a loan from them.
- Since the loan is secured, you will be able to get a lower interest rate than you would if you went with credit cards or unsecured loans.
All these reasons combined together had me convinced and so I went for the second mortgage instead! You might be worried about the fees that you might incur as a result of acquiring a second mortgage. The fees that you will experience are going to be determined by the amount of work that has been done by the lender and your mortgage broker and lawyer. You should not worry about this because such fees are usually not exorbitant and the other reason is that you will know exactly how much you are to pay them upfront.
I was able to complete my home renovations and give it a makeover but I also invested in another property. It took me some time to complete my ranch-style home, as I had decided to restore it to its original look and style. Many people admire it and I love it too, I even converted part of it to create a space for my mother whom I care for, she really likes her independence; and so do I!
I later sold the other property at a profit and was able to pay off the loan and make a profit on the sale of the house. You can do the same and just watch everything work for you!