If you have been in your house for a period of time you can access the equity in your home and obtain a second mortgage as low as $10,000. Equity is the difference between your home’s appraised value and your loan balance, therefore, the more you pay towards your Kitchener Waterloo mortgage, the more equity you will have in your home. Homes in Kitchener Waterloo have been increasing in value the past couple of years.
So, to help give you a better understanding on second mortgages and how your home’s equity can benefit you, our team at KW Mortgage Group in Waterloo have listed everything you need to know about getting a second mortgage.
Second Mortgage Qualifications
As mentioned previously, in order to qualify for a second mortgage you will need to have enough equity in your home. You can increase your equity in two ways. The first is by paying off your mortgage every month and the second is by appreciation. Over time, most homes appreciate in value depending on where you live and the type of home you have. Therefore, without you needing to do anything, your home could become more valuable.
You will also need to be sure and have good credit in order for your loan to get approved. Just as your credit score largely determined what interest rates you would receive on your primary mortgage, it is just as important for your second mortgage. To help raise your score, pay off any high-interest debt and make sure to avoid applying for more credit until after your loan has been approved.
Another qualification requirement for a second mortgage is to not have too high a balance on your first mortgage. If you owe too much money, you risk the chance of your loan application getting denied.
For more information on second mortgage requirements, please contact your Kitchener Waterloo mortgage broker at 519-571-1121.
Second Mortgage Benefits
There are multiple benefits associated with a second mortgage. Many homeowners choose to take out an additional mortgage to help pay for more real estate, such as a vacation home or an investment property. Other’s use this loan to fund home improvement projects, such as a kitchen remodel or adding on an extra room to the house.
You can also use a second mortgage for non-home related things. With a second mortgage, you can consolidate your debt into one payment or you can use the money from your mortgage to pay off high-interest loans. You can also use a second mortgage to pay for education instead of taking out a student loan, or you could even use a second mortgage to pay for a dream vacation.
As long as you have at least 10% equity in your home, you can obtain a second mortgage and use that money any way you would like.
Contact Us
For more information on second mortgages or to get started on your application today, please contact your mortgage broker in Kitchener Waterloo, KW Mortgage Group, at 519-571-1121.