A second mortgage in Toronto is a handy option that can be taken on your home on which you have an existing first mortgage. A second mortgage amount will be based upon the equity that in available in the property, after an appraisal has been completed. Typically this mortgage will be of a lower priority compared to the primary mortgage and the first mortgage loan will be paid off first in the event of insolvency. In case you have opted for refinancing of the first loan after availing of the second mortgage, you have to request for the subordination of your second loan from the lender.
Second mortgages can be availed in a variety of circumstances. These mortgage loans can be taken to invest in lucrative investment schemes that would ensure higher returns than the interest rates of the second mortgage. People take out a second mortgage Toronto, ON loan for a variety of reasons including debt repayment, medical bills payment, financing the education costs, home renovation, buying another home, creating a home equity line of credit, and even for a auto loan to buy a new car. The second mortgage is also referred to as Home Equity Loan in many instances. If you are eligible for a loan that is about one-fifth of your original home purchase amount, the private mortgage insurance may be waived off – do speak to a licensed insurance rep to confirm the same.
The interest rate on a second mortgage loan in Toronto will be more than those of the first mortgage and it will have a shorter duration than the first mortgage – usually one year in term. Thus a second mortgage will mean that you are responsible for the timely repayment of both the first and the second home mortgage. A healthy track record that shows timely repayment of the first loan will greatly increase your chances to qualify for the second mortgage loan.
Before choosing the right second mortgage loan, you need to compare the various quotes provided and never fall for the first offer that you might come across – ask questions. Online research is the quickest and the easiest way to find out about the various mortgage loans offered and a well-informed decision is what pays off in the end. So, do consider all factors and re-payment terms, as your second mortgage decision will cost you dearly, if you are not prudent with your finances.
Make sure that you are well aware of all the terms and conditions of the loan from your mortgage broker in Toronto. Do not choose any loan that requires a costly prepayment penalty in the event you pre-pay the mortgage early or miss a payment inadvertently. Read the documents clearly and in case you are in doubt, do not hesitate to avail the services of a mortgage specialist who will suggest the best possible option for you and ensure you are connected with a lawyer to protect your interests.
Second mortgage loans come as handy sources of funds to meet your well-cherished holiday plans or to meet the education expenses of your children. Mortgage markets are flooded with many a type of home loan and a qualified mortgage broker lender in Toronto will help you choose the best option.