Second Mortgages

Need to pull some equity out of your home? 

A second mortgage (or home equity loan) is a great way to finance your home improvement projects that increase the value of your home.  One thing to be careful of is using it for the wrong reasons.  You want to take those funds and put them towards adding value to your home.  It only makes sense if the improvements you make will increase the value of your home more than the amount of the loan.  Here is an article with some excellent points to consider:

Second Mortgages

A second mortgage is a loan that is secured by the equity in your home. When you obtain a second mortgage loan the lender will place a lien on your house. This lien will be recorded in 2nd position after your primary or 1st mortgage lender’s lien, hence the term second mortgage.

A second mortgage is also sometimes referred to as a home equity loan. There is no difference between a home equity loan and a second mortgage. These are just two different terms for the same subject.

A second mortgage can either be a fixed-rate loan or an adjustable-rate credit line. Interest rates and loan program terms will vary from lender to lender so it is important to shop around and compare before committing to any one offer.

Loan proceeds from a second mortgage loan can be used for just about anything. Many consumers take out 2nd mortgage loans to consolidate debt, do home improvements or pay for their kids college education. Whatever you decide to do with your loan proceeds it is important to remember that if you default on your payment you can lose your home so you will want to make sure that you are taking the loan out for a worthwhile purpose.

Another plus of a second mortgage loan is that the interest you pay back on the loan may be tax deductible. Consult your tax advisor regarding your personal situation but in most cases the interest is 100% fully deductible as long as the combined loan to value of your 1st and 2nd mortgage do not exceed the value of your home.

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Levetta Rivera is a successful mortgage broker and publisher of the following financial websites: http://www.equityloansource.com and http://www.militaryvaloan.com

For more information on second mortgage loans, or to compare rates and programs of second mortgage loan lenders visit http://www.equityloansource.com

Thanks, Levetta, for that excellent article!  If you’d like to learn more about getting a home equity loan (or second mortgage), we can put you in touch with an expert in the Sacramento area, today!  Talk to an expert >>