The loan market is definitely interesting, to say the least, and you’re probably, undoubtedly going to find that there are many opportunities out there to make use of your home equity. Do you have any equity left in your home? If so then you might be tempted to use it and there are a ton of different options that you can take advantage of. One of which, of course, is taking out a second mortgage.
Let’s be clear, while the term ‘second mortgage’ might sound bad, it is a great way to get some extra cash if you ask yourself the right questions. So what are the right questions? At what should you consider using Coral Springs home loans for a second mortgage? Let us walk you through the process and help you to determine whether or not your home is truly ready for a second mortgage.
Coral Springs Home Loans – Gearing Up for the Second Mortgage
Before you rush to the bank ready to sign off on any paperwork you need to walk out with cash in hand you need to ask yourself one very important question: what do you plan to do with the money that you get from the mortgage? There are tons of different possibilities but you need to make sure that you do in fact have clear plan, aside from ‘getting money’. You are after all borrowing against the equity of your home and doing so a second time. In this economy that can actually be quite a risk, and perhaps not one that you actually want to take.
Some of the most common reasons for obtaining a mortgage include:
- Credit Card Bills
- Child’s Education
- Financial Obligations (Bills, etc)
- Medical Bills
As a point of interest, there are some homeowners who will take out a mortgage in order to invest in other properties, but this is not a recommended action by any stretch of the imagination. Even with the best home loan rates in Coral Springs, you run the risk of taking a serious loss if the property market takes a downturn. You will look at the potential for both properties decreasing significantly in value, and you will ultimately be left with a large mortgage payment in addition to payments on a property that really isn’t turning a profit. For this reason we strongly suggest finding other means to fund your property endeavors, though in the end, we cannot tell you what to do with your money. All we can do is strongly discourage you.
In the end, we strongly advise you to make sure you know exactly what you’re taking the money out for. Keep in mind that taking out that second mortgage can present problems if you want to modify your loan, refinance, or in the event you need to sell your home in a short sale for less than the amount of money you owe on the second mortgage. In addition to that, when you are applying for your mortgage, you must make sure that you get the one that works best for you. There are several different types of loans available, some of which are suited for you, and then there are those that are less so.
Home Equity Loan
This is the most common type of loan and it works exactly like a mortgage. Essentially, you have a fixed rate mortgage that can be paid in virtually any increment. Most commonly, however, you will have a 15 to 30 year repayment plan, giving you plenty of time to work out the fine details. In addition to that you could choose to make use of an adjustable rate mortgage if you are looking for something with a much shorter repayment schedule.
A HELOC is a home equity line of credit which works very much like a credit card. This permits those who take out a mortgage to use their line of credit which is based on their home equity. With this particular method you have a variable interest rate but no set term.
Home loans in Coral Springs FL can definitely have their benefits if you look for them, and it won’t be too long before you find yourself in a mortgage that really, truly benefits you. Remember, the higher your credit rating, the better the chances of qualification, so make sure you get your ducks in a row first. If you’re ready for your second mortgage, give us a call today!