The Second Mortgage

Everyone has heard of them but not many people really understand what a Second Mortgage is or how it can be one of the best choices for certain financial situations. All a Second Mortgage is is a loan secured by the equity in your home registered as a second mortgage.

A Second Mortgage may be the best choice for you if you need to access an amount of money say $25,000 to $75,000 or more and want a low monthly payment. Because a Second Mortgage can be amortized over a longer period the monthly payments can be kept very low. For example a Second Mortgage of $45,000 could be had for a monthly payment of around $375. This can be used for any purpose you desire such as renovating the basement, building a new garage or even a vacation down south in the middle of February.

Most people will opt for a Second Mortgage when their current mortgage is at a very favorable rate or to break it would incur significant penalties. This allows them to access the equity in their home and when their first mortgage is due for renewal roll the Second Mortgage into the first and be left with only one mortgage payment.