To help you get a better understanding of what a Brampton second mortgage is, and reasons behind why you might need one, our team of experts at Lotus Loans & Mortgages have explained everything you need to know about second mortgages.


What Is A Second Mortgage?

 

This is where a homeowner takes out another mortgage on their home, in addition to their existing one. To do so, you will need to have good credit and at least 20% equity in your home. If you meet these requirements, your interest rates could be around 3.95%.  If you have bad credit and less than 20% equity in your home, you can still obtain a second mortgage, however, your interest rates could range between 8% to 15%.

 

Benefits Of A Second Mortgage

 

Many homeowners choose to obtain a second mortgage in Brampton to access their equity without needing to sell their home. This can be done by obtaining a home equity line of credit or 2nd mortgage. Borrowers can access their equity and use this cash any way they would like, whether it be to renovate their home, make a large purchase such as buying more real estate, to pay off debt, or even to go on a trip.

 

Another benefit of a second mortgage is it allows you to consolidate your debt. This is an excellent option if you have accumulated a lot of debt from credit card companies. With credit card interest rates ranging from15%-21%, it would benefit you the most if you obtain an additional mortgage, where the rates are much lower, to pay off your high credit card balance.

Second Mortgage Qualification Requirements

 

To qualify for a second mortgage in Brampton, you will need to have equity in your home. The more equity you have in your home, the more likely you will be approved for this mortgage 

 

Another important determining factor is your credit score and income. Just as these helped determine what kind of rates you would receive on your first mortgage, they are equally as important for your second one. Lenders want to know that you are dependable and that you are financially capable of paying back this loan. Therefore, the higher your credit score is and the more dependable of an income you have, the better rates you will receive on your second mortgage.  That being said, even if your credit is poor or your income is hard to prove, rest assured that we will find an option for you.

Contact Us

 

For more information on second mortgages, or to get started on your Brampton mortgage application today, please contact the Lotus Loans & Mortgages team at 905-791-1100.