Stewart Brown Jr – Mortgage Loan Originator – Purchase or Refinance
| A second mortgage is a lien taken out against a property that already has a home loan on it. A lien is a right to possess and seize property under specific circumstances. In other words, your lender has the right to take control of your home if you default on your loan. When you take out a second mortgage, a lien is taken out against the portion of your home that you’ve paid off.
Unlike other types of loans, such as auto loans or student loans, you can use the money from your second mortgage for almost anything. Second mortgages also offer interest rates that are much lower than credit cards. This difference makes them an appealing choice for paying off credit card debt. The equity you have in your home is a valuable asset, but unlike more liquid assets like cash, it isn’t typically something that you can utilize. A second mortgage, however, allows you to use your home’s equity and put it to work. Instead of having that money tied up in your home, it’s available for expenses you have right now. This option can be a help or a hindrance, depending on your financial goals. Specific requirements for getting approved for a second mortgage will depend on the lender you work with. However, the most basic requirement is that you have some equity built up in your home. Your lender will likely only allow you to take out a portion of this equity, depending on what your home is worth and your remaining loan balance on your first mortgage, so that you still have a certain amount of equity left in your home (usually 20% of your home’s value). To be approved for a second mortgage, you’ll likely need a credit score of at least 620, though individual lender requirements may be higher. Plus, remember that higher scores correlate with better rates. You’ll also probably need to have a debt-to-income ratio (DTI) that’s lower than 43%. |
| A second mortgage is a lien taken out against a property that already has a home loan on it. A lien is a right to possess and seize property under specific circumstances. In other words, your lender has the right to take control of your home if you default on your loan. When you take out a second mortgage, a lien is taken out against the portion of your home that you’ve paid off.
Unlike other types of loans, such as auto loans or student loans, you can use the money from your second mortgage for almost anything. Second mortgages also offer interest rates that are much lower than credit cards. This difference makes them an appealing choice for paying off credit card debt. The equity you have in your home is a valuable asset, but unlike more liquid assets like cash, it isn’t typically something that you can utilize. A second mortgage, however, allows you to use your home’s equity and put it to work. Instead of having that money tied up in your home, it’s available for expenses you have right now. This option can be a help or a hindrance, depending on your financial goals. Specific requirements for getting approved for a second mortgage will depend on the lender you work with. However, the most basic requirement is that you have some equity built up in your home. Your lender will likely only allow you to take out a portion of this equity, depending on what your home is worth and your remaining loan balance on your first mortgage, so that you still have a certain amount of equity left in your home (usually 20% of your home’s value). To be approved for a second mortgage, you’ll likely need a credit score of at least 620, though individual lender requirements may be higher. Plus, remember that higher scores correlate with better rates. You’ll also probably need to have a debt-to-income ratio (DTI) that’s lower than 43%. |
Reach out to me for further detailed information on Second Mortgages.