Second Mortgage Lenders

Shopping for a second mortgage is just like shopping for the first mortgage on your home. You’ll have to locate a lender, get qualified and make a payment on the second mortgage.

There are many second mortgage lenders out there and most of them offer mortgages online. Going online is the best way to look for a second mortgage because online lenders usually offer the best interest rates.

Doing an internet search should produce a list of second mortgage lenders that operate in your area. Using the mortgage calculator features on the lenders websites should enable you to find the best mortgage interest rates. Comparing second mortgage quotes can greatly reduce the cost on a second mortgage.

What Second Mortgage Lenders Look For

To get a second mortgage you’ll have to equity in your home. This means that the house’s value exceeds the principal of the mortgage. Those without equity in their home will not be able to get a second mortgage.

Second mortgage lenders usually only lend to those who have quite a bit of equity in their home. If your home value has fallen or you’ve taken out other mortgages you may not have enough equity to get a second mortgage.

A good way of increasing your ability to get a second mortgage is to pay off a large percentage of your mortgage principal. This will increase the equity in your home and the amount of money you can borrow against it. Those who pay off a large percentage of their mortgage will always have a better chance of getting a second mortgage.

Drawbacks to Second Mortgages 

There are some serious drawbacks to second mortgages that homeowners should be aware. Taking out a second mortgage means that you will have a second mortgage payment. You should never take out a second mortgage if you are unable to make the second mortgage payment.

The second mortgage payment will reduce your disposable income and your ability to pay other bills and expenses. You should make a budget that includes the second mortgage payment before taking out the second mortgage. This can tell you if you can afford the second mortgage.

You should never take out a second mortgage that you can’t afford because it could increase your risk of foreclosure. A second mortgage could make your home too expensive and cause you to loose it.

Taking out a second mortgage on your home will increase your debt and could lower your credit score. Lowering your credit score could make it harder to get loans and mortgages in the future.

Choosing a Second Mortgage Lender 

Always choose the second mortgage lender that offers you the lowest interest rate because a lower interest rate will give you lower payments.

Never get a second mortgage with an adjustable rate because in those mortgages the lender has the ability to raise the interest rate at any time. This could increase your mortgage payment and make the mortgage unaffordable.