A second mortgage is a fixed rate, simple interest instalment loan which is a lien on your property title behind your existing mortgage.A second mortgage loan allows you take equity out of your home without the need of refinancing your current mortgage.A second mortgage loan can help you consolidate your high interest debt which can provide several benefits such as lower combined monthly payments, changing combined interest into a simple interest mortgage and changing the interest on debt payments into a new tax deduction.
Home owners who have little or no equity may be able to get a second mortgage that exceeds the appraised home value. However, a good credit is the key to getting a high loan to value program.The interest rates are influenced by a number of loan factors such as credit scores,the amount of the mortgage, debt to income ratio, your disposable income and the value of your home.
Payment terms are usually offered in 5 year increments, which can range from 5 to 20 years.The application process for a second mortgage loan is easy and painless because the lenders have an easy way of computing how much you can borrow and rate and terms of the loan amount.Generally, the lender will appraise of your property and check your credit history and income status.Even though, the paper work seems to be easy and not a taxing one, be prepared for some required documentation.
Depending on the amount of equity you have on your home, you may be provided a loan based on a percentage of the home's total value.Lenders will see various details about your credit history before offering you a loan, so besure to take advantages of of online comparison services that provide multiple loan offers without obligating you to sign up.
When comparing a second mortgage loan to a HELOC, you have to remember that payments on the second mortgage will be fixed and rates will vary for HELOC.Do a careful calculation on what type of payments you can afford taking into consideration your first mortgage, your car and personal loan payments and your household expenses.Your current financial needs will help you determine what type of loan is right for you.
Friday, October 5, 2007
Refinancing Mortgage Loan
Refinancing mortgage loan brokers are a good source for your refinancing mortgage loan.However, you have to avoid overpaying for your new mortgage.Brokers are benefiting unscrupulously by a mortgage rate that includes Yield Spread Premium and serve their need for a commision instead of finding you a good deal.They are only keen on their profits by boosting up your interest rate.
It is advisable to discuss with the interest rate in advance so that you can avoid paying high interest once you have entered into the deal.Tell your broker that you will only pay a reasonable origination fees for their services and will not pay any Yield Spread Premium with your interest rate.
Choosing a right type of mortgage loan is also very important before closing a deal with a mortgage loan broker.If you do not understand the mortgage details fully well, do not sign the documents.The type of the mortgage and the duration of the loan depends on your financial situation, tolearance for risk and your goals for the loan.
With a fifteen year mortgage you will benefit a lot by paying significantly less in finance charges and qualify for a lower mortgage rate.So, a fifteen year loan is better than a 30 year loan regarding the facilities available.Adjustable rate mortgages can save you money if you are having the stomach for the risk involved.
Some Tips on Refinancing your Mortgage
When evaluating lenders in the mortgage loan pre-approval process, you have to pay special attention to the interest rates offered and the closing costs.These are bigger factors in deciding which lender will suit you most.If one of these factors is high, it may affect the benefit of refinancing for you.
Get your interest rate and closing costs in writing as soon as you decide on a lender to work with.Get the right information on the costs involved in the loan in advance from your lender.Find out if the refinance loan you are getting has a pre-penalty as well.Some people even do not know that.
It is advisable to discuss with the interest rate in advance so that you can avoid paying high interest once you have entered into the deal.Tell your broker that you will only pay a reasonable origination fees for their services and will not pay any Yield Spread Premium with your interest rate.
Choosing a right type of mortgage loan is also very important before closing a deal with a mortgage loan broker.If you do not understand the mortgage details fully well, do not sign the documents.The type of the mortgage and the duration of the loan depends on your financial situation, tolearance for risk and your goals for the loan.
With a fifteen year mortgage you will benefit a lot by paying significantly less in finance charges and qualify for a lower mortgage rate.So, a fifteen year loan is better than a 30 year loan regarding the facilities available.Adjustable rate mortgages can save you money if you are having the stomach for the risk involved.
Some Tips on Refinancing your Mortgage
When evaluating lenders in the mortgage loan pre-approval process, you have to pay special attention to the interest rates offered and the closing costs.These are bigger factors in deciding which lender will suit you most.If one of these factors is high, it may affect the benefit of refinancing for you.
Get your interest rate and closing costs in writing as soon as you decide on a lender to work with.Get the right information on the costs involved in the loan in advance from your lender.Find out if the refinance loan you are getting has a pre-penalty as well.Some people even do not know that.
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