The ability to borrow money against your property is one of the biggest advantages of homeownership. Use a second mortgage and tap into the power of your home’s equity to pay for college tuition, essential home improvements, pay off large debts, or accommodate other pressing financial needs.
By definition, a second mortgage is any loan that involves a second lien on the property, but you generally have two options: a Home Equity Loan or a Home Equity Line of Credit.
With a home equity loan, you can borrow a lump sum of money to be paid back monthly over a set time frame, similar to your first mortgage.
These loans are commonly used by people seeking money for a one-time event or prefer interest rate stability.
A home equity line of credit (HELOC) is a form of revolving credit secured by the equity in your home. This is an open-ended loan that can be paid down or charged up for the term of the loan, much like a credit card. Once your loan term is up, you are required to pay off the loan, making monthly payments on the principal and interest.
This type of loan is commonly used by people seeking access to a reserve of cash over a period of time.
Get in touch today to learn more about Second Mortgages and whether a Home Equity Loan or HELOC is right for you.