Why Take Out a Second Mortgage?
There are many reasons why a consumer would want to
consider taking out a second mortgage loan on their
property. Life can be unpredictable, and many people
find themselves in need of cash for a variety of different
reasons, including to consolidate their debt and pay
a lower interest rate on it, to finance a child’s
college education, to pay for home improvements, or
to deal with an unanticipated expense such as a prolonged
inability to work, mounting medical bills, or the cost
of caring for an elderly loved one.
Whatever the reason, consumers who own a home and are
in need of money often choose to take out a second mortgage.
The advantages in doing so include: the obvious, access
to needed cash, as well as, a tax deduction for interest
payments. Note: Tax deductions are offered within certain
parameters. Be sure to check with a tax professional
or the Internal Revenue Service for the exact details.
There is usually less paperwork involved in a second
mortgage loan, although your lending institution will
most likely require at least a basic appraisal of the
property in question.
Closing costs for a second mortgage loan are not as
expensive, because the escrow and insurance costs involved
are usually minimal compared to an original mortgage.
Your loan officer will review these expenses with you.
Once you have decided to take out a second mortgage
loan, do some research online. Compare the rates and
terms of several lending institutions before making
a choice. Also consider the firm’s reputation
and their customer service standards.
Choosing a lender you are comfortable with and can
trust will make the second mortgage loan process easier
and more efficient.