Second mortgage is a type of secured loan on already mortgaged property. The second and subsequent mortgages are often used to get money in those cases where the cost of real estate since the registration of a first mortgage has increased significantly. As the first mortgage lender keeps ownership documents on the property, the lender of the second loan takes on higher risk, and hence the sets higher loan rates. For example, property owner estimated at 50 thousand dollars has already taken a loan of 25 thousand dollars according to the first mortgage, may wish to obtain an additional $ 5,000 against his property, bringing the total debt to 30 thousand dollars. It is possible with the second loan solutions.
Vancouver financial expert consider that such type of loan may be the answer for you when you urgently need money. The money that you will get through it can be used for various purposes like paying off your high interest debts, home improvement, and purchasing of additional real estate. Second loan is simply another mortgage on your home that is also secured against your property. Thus, if you are a resident of Canada and you are considering of applying for this type of loan, there are a few things that you must take into account.
There are different purposes of taking out a second loan in Canada. It is also well-known as a home equity loan. Such a loan can be used for any financial needs of the borrower. Statistics shows that Vancouver residents prefer to finance family vacation, remodel the house or repay multiple credit cards with the help of this loan. Vancouver experts think that in some cases it is considered as a perfect instrument for debts consolidation. Before taking a final decision you should have a home appraisal that determines the market price of your home and thoroughly examine the necessity of taking it out as home equity loan is quite serious and risky financial undertaking.
Of course, there are a lot of other types of loans which can provide you with quick cash, but there are at least two reasons to take out a second mortgage: it is quite simple to qualify for this loan, the rates are reasonable and hence repayment is easier and faster than any other type of loan. But you should always remember that there is a risk to lose your real estate property, so you have to worry about stable income to be able to make monthly repayments. To avoid misunderstanding with the bank issuing you a loan Vancouver financial experts recommend to contact experienced mortgage broker.
Although bank interest rates are rather high (10-20 %), this financial instrument works in Canada, because approval for this loan is based on how much equity you have invested into your house, but not on a credit history and income qualifications. That is why a lot of Vancouver residents have already taken out this type of loan.
Dale Miles in cooperation with Hugh Russell for JessiJohnson.ca second mortgage solutions in Vancouver.