2nd-Mortgage

When you think about a second mortgage, what do you think of first? Which aspects of a second mortgage are important, which are essential, and which ones can you take or leave? You be the judge.

Great news! You qualify for second mortgage. Now what would you like to do with the second mortgage? It will be your answer to this question that determines whether or not your second mortgage is your friend, or your foe. That seems to be an awfully strange way to look in a second mortgage; however that’s exactly what the mortgage will be.

In a fixed rate mortgage, as the name suggests, the interest rate for your mortgage is fixed for an appointed period of time which in Canada is usually between 6 months to 25 years. The good thing about a second mortgage with a fixed rate is that you know how much you are paying for a set period of time which is technically called ‘term’.

The interest rate of a second mortgage tends to be higher than the primary mortgage, due to the fact that if any problems occur, payment would first be made to the first mortgage.
Lastly, don’t forget the additional closing costs such as, appraisal fees, application costs etc. If you aren’t capable of paying these fees, you may not be able to take out that second mortgage on your property.

If you have to qualify for second mortgage, please think it through very carefully and consider all your options before making a final decision on taking out a second mortgage application.