Second Mortgage: Better Source Of Needed Cash
By: Mike Hamel | Posted: 17th August 2007
A second mortgage is a mortgage taken out in “second position” on a property that already has a mortgage. A second mortgage will give you a fixed amount of money repayable over a fixed number of years.
Get better interest rates with a second mortgage
Second mortgages come with better interest rates than other types of loans. You can select either a fixed rate or an adjustable rate of interest. If you select a fixed-rate second mortgage and you stay in your home for several years, you’ll save money over an adjustable-rate loan if interest rates go up, which they usually do.
Lower monthly payments with a second mortgage
According to financial experts, debt consolidation is the second most popular reason homeowners take out second mortgages. Debt consolidation could leave you with a single monthly payment instead of a number of bills. This can decrease your monthly expenses and increase your cash flow.
Increase your home’s value with a second mortgage
Accessing the equity in your home is one way to pay for home improvements. But not all improvements are created equal. The best return-on-investment for your home improvement dollars are:
- Remodeled rooms - kitchens and bathrooms add the most value.
- Second-story addition - as long as it matches your home’s existing style.
- Family room addition or basement finish - increasing usable square footage is a good idea.
- Energy efficiency - new heating or cooling system, new windows or added insulation.
A remodeling rule of thumb suggested by The National Home Builders’ Association is to keep the total value of your home to no more than 15% above the median sales prices for homes in your area.
Get more second mortgage information, plus a no-risk loan quote at Simple-Mortgage-Refinancing. It will cost you nothing to see if a second mortgage could be a good financial move for you.
About the Author
Occupation: writer
Mike Hamel is the author of three business books and scores of online articles. Check out his blog “Cells Behaving Badly” at www.mikehamel.wordpress.com.
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Tags: rule of thumb, monthly expenses, home improvements, debt consolidation, mortgage refinancing, lower monthly payments, second mortgages, kitchens and bathrooms, financial move, adjustable rate loan, financial experts, risk loan