Dominion Lending Centres’ Mortgage Force is a trusted name when it comes to securing second mortgages in Edmonton. Our team of experts helps to cut our customers’ monthly payments on second mortgages in half. Don’t pay minimum payments on credit card bills, car loans, and other unsecured debt when you’re only paying off the interest.
A second mortgage is a loan that allows you to use your home as the collateral for the loan. You can often borrow a much larger amount than you usually would be able to, based on the value of your home rather than your creditworthiness or your income. This is very similar to the original loan you got in order to purchase the home, but there is a difference.
With your first mortgage or the mortgage you got to buy the home in the first place, the home has a lien placed against it. That means that if you default on the loan, the home can be repossessed. Technically, although you can treat your home like your own (unlike renting), the bank “owns” your home until you pay it off – in the sense that they have the legal right to repossess it in certain circumstances.
A second mortgage is more about the value of your home rather than the home itself. In order to understand this, think of your home as an investment, similar to buying a stock on the stock market. As the real estate market changes, your home (or, your investment) gains and loses value. This can be a great way to invest in your future, and it’s why real estate moguls are so successful. They buy properties when the market is low, and sell when the market is high.
Most homeowners in Edmonton who get second mortgages do so because they need to invest a lot of money into something, and their home is the most valuable asset they have to use as collateral. This may mean that you need to make a very large home repair or upgrade. It may mean that you want to send a child to college. It may mean that you want to buy another property to rent out. Whatever the case may be, a second mortgage can be used as a way to get a large amount on a loan.
Second mortgages are typically awarded as either a single lump sum (useful for making one large purchase, like upgrading your home to solar power) or a line of credit (useful for paying something in installments, such as yearly tuition fees). With the second option, you have the ability to not borrow all of the money that you are approved for, which can help you keep the amount you have to pay back to a minimum if you aren’t sure how much you need.
In either case, the lender determines how much they will loan you based on the value of your home. From there, you’ll choose the type of interest rate, such as a fixed rate or a variable rate, that works for you.
Second mortgages are loans against the equity in your home that sit behind the existing mortgage on the title of your home. Dominion Lending Centre’s Mortgage Force offers clients advice for solutions on second mortgages in Edmonton and the neighbouring areas for; debt consolidation, investing in a small business, and post-secondary education for your children, as well as the unexpected costs that come up from time to time.
The amount available to homeowners for second mortgages depends on the equity they have in their house. Home equity is the value of your home minus all the debts you have against your home. If you want to calculate the equity in your home, look at the following example:
Let’s assume your home is valued at $450,000. Our mortgage team can help provide you financing of up to 80% of this value in this case, that’s up to $360,000. Let’s assume you’ve borrowed $300,000 against this already. This leaves you with the option of securing a second mortgage of up to $60,000!
Second mortgages are loans against the equity in your home that sit behind the existing mortgage on the title of your home. The Mortgage Force Team Edmonton Dominion Lending offers clients advice for solutions on second mortgages in Edmonton and the neighbouring areas for debt consolidation, investing in a small business, and post-secondary education for your children, as well as the unexpected costs that come up from time to time. Learn more by calling us at 780-466-9898.