| A second mortgage, or a home equity loan, is | | | | is easier than applying for your first |
| a good option if you've got climbing debt and | | | | mortgage. With second mortgages, there isn't |
| some equity built up in your home. Taking out | | | | quite as much paperwork, or as much time to |
| a home equity loan or a home equity line of | | | | wait for approval. Since you have the |
| credit may be a viable solution for you, but | | | | collateral of your home you represent a lower |
| only if you find the right second mortgage | | | | risk to the lending institution. |
| interest rate. | | | | |
| | | | There are two types of second mortgages to |
| You can use the funds from your second | | | | choose from: the second mortgage loan and the |
| mortgage or line or credit in order to pay | | | | second mortgage line of credit. Your second |
| off debt, do home renovations or consolidate | | | | mortgage loan acts a lot like your first |
| your bills. However, if you're using it to | | | | mortgage. You receive a lump sum of money. |
| pay off debt and you don't do anything to | | | | The second mortgage has lower closing costs |
| adjust the way that you have been spending | | | | than the first, but you are also paying a |
| money then you'll end up overspent again in | | | | higher interest rate with the second |
| just a few years. Don't think of a second | | | | mortgage. |
| mortgage as a band-aid to a bad spending | | | | |
| habit. Take out the second mortgage but also | | | | The second mortgage line of credit acts like |
| start using a family budget and control | | | | a credit card with a standard credit limit, |
| frivolous spending. | | | | but a line of credit has a variable rate. The |
| | | | interest will change depending on the month, |
| That being said, getting a good second | | | | which can be really great when interest rates |
| mortgage interest rate is definitely possible | | | | are low like they have been lately, but |
| even in today's market where interest rates | | | | difficult if they are high. You can use your |
| are starting to climb. Even with the | | | | line of credit as long as you have funds, but |
| increases, they are still lower than they | | | | there is a cap to how much you can spend. At |
| were ten to fifteen years ago. If you have an | | | | a certain period of time, 5, 10 or 20 years |
| older home, it's still a good time to take | | | | in the future, you won't be able to borrow on |
| advantage of the equity built up in your | | | | the line of credit any longer and you'll have |
| home. | | | | to start making standard monthly payments. Up |
| | | | until that point, you can pay off as much or |
| Getting a good second mortgage interest rate | | | | as little as you'd like to each month. |