Second Mortgage Options

Want to know more about second mortgage options that are possibilities available to you? A second mortgage is a second loan that you take on your home. You can borrow up to 80% of the appraised value of your home. From this amount, you must subtract the balance you owe on your first mortgage.

The loan is protected by the equity in your home. As you pay off your second mortgage, you must also continue to pay off your original mortgage. If you can’t make your payments and are in default, you can lose your home entirely. Your house is sold to pay off the first and second mortgage. Your first mortgage lender is paid off first.

Interest rate and fees for a second mortgage

The interest rate on the second mortgage is usually higher than your original mortgage. This is the case since they present more risk for mortgage lenders. You may be required to pay administrative fees such as:

  • Assessment fee
  • Title search fee
  • Title insurance fees
  • Legal fees

Get a home equity line of credit

A home equity line of credit is another second mortgage option. It works like a regular line of credit. You borrow the money wherever you want, up to the credit limit. You pay it back and can borrow it again. This line of credit is secured by your home.

Interest rates and fees if you have a home equity line of credit

The interest rate is variable on the home equity line of credit. The rate changes when the market interest rates rise or fall.

You may be required to pay administrative fees such as:

  • Evaluation fee
  • Title search fee
  • Title insurance fees
  • Legal fees

Getting a reverse mortgage

A reverse mortgage is a loan that allows you to borrow up to 55% of the current value of your home. You must be the owner and be at least 55 years old to get a reverse mortgage.

Interest rates and fees if you get a reverse mortgage

The interest rate on the reverse mortgage is usually higher than that of a conventional mortgage. It can be fixed or variable. You may be required to pay similar administrative fees as you would for a second mortgage or home equity line of credit.

Borrow on sums already reimbursed

You can borrow an amount that you have already repaid again. If you have paid a lump sum on your mortgage, your lender may allow you to borrow that amount. You can borrow the full amount of any prepayment. Any amount you borrow again is added to your mortgage total.

Interest rate and fees if you borrow a repaid amount

You will pay a blended interest rate or the same interest rate as your mortgage for the amount borrowed. A blended interest rate is your current interest rate and the rate currently offered for a new term. The fees vary between lenders. Be sure to ask your lender for the fees you owe. You may not have to change the term of your mortgage. To get a second mortgage, start by checking out this website

Meet the Author

Karie Herring

Karie Herring rambles of a former life in Phoenix, AZ while raising a teen and tween twins in their new home in Orlando, FL. She has been featured in AOL Money & Finance, Betty Confidential and Career School Now. She's a full-time technical writer, functional fitness athlete, overachieving wife and mom. She loves talking about maneuvering motherhood, womanhood, and her passion for essential oils and natural living.

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