
		HOME \| Membership Websites \| SMM Solutions \| CRM Solutions \| Online Training Systems \| Publishing \| Clients \| Guarantee \| Log In

Second Mortgages or a Further Advance

Submitted by Collette Royal | RSS Feed | Add Comment | Bookmark Me!

If you are a homeowner and in need of some extra cash, one possibility you could consider is taking out a second mortgage. If the present value of your house exceeds the amount you paid for it (your mortgage total), then you have equity that can be used to borrow more money. This is basically a loan that is secured on your house – and is sometimes termed a further advance.

Finding Another Lender?

You can approach your existing lender for a second mortgage, or shop around for a lower interest rate. It’s likely your second mortgage will be for a lesser amount of capital, but will nevertheless be subject to higher interest rates and possible charges. This is because it represents more of a risk to the lender – the lender takes a ‘second charge’ over your property, which means that if the debt was recalled and your house repossessed, they would be second in line after your main lender to receive their debt.

For What Purpose?

Secured loans and second mortgages are popular with people who want to raise extra funds – for example if you want to carry out home improvements or set up in business and need capital to get going. Although it can be a good way to find a cash lump sum fast, be aware that you are eating into the investment that your property should be. You should make sure that you have planned for the extra cost of repayments beyond what you initially were bound to. If the mortgage term will last into your retirement, will you be in a position to keep up the repayments?

Understanding The Small Print

While there are any number of lenders offering second mortgages, before you commit yourself to one you should be totally clear about the terms offered. Although there may be a special offer or discounted period of low interest, often these will revert to a higher rate after the set period – once again, you need to take the long term view rather than the short term. Also, your equity can provide a security cushion so that if market prices fall, you will avoid the negative equity ‘gap’ – taking out a second mortgage means you will lose that safety feature. (This is where the phrase ‘mortgaged up to the eyeballs’ is particularly apposite.)

You should also take into account any other costs that you may incur – arrangement fees, a re-valuation survey, additional payment protection etc.


Contact Us Support and Sales

LinkedIn Recommendation:

Jeff Brodsky - Director of Operational Excellence at Park N' Fly - I worked with Teo during the early stages of Net-Teams and he is a powerhouse with an extraordinary ability to bring together teams and ignite them behind his vision. He has a great understanding of the process of building companies through building a vision and a team and developing capital and has been a pioneer in social networking in the Atlanta Mtero market. - January 23, 2011, Jeff worked directly with Teo at Net-Teams, Inc.

Featured [mortgage] Articles:

Net-Teams - Helping Businesses Prosper With Custom CRM, SMM and Online Training - Net-Teams, Inc. (NTI) is a technology and marketing firm and offers access to a core set of system t...

The Benefits Of A Membership Program For Your Website - Building membership through your website allows you to automate the acquisition of prospects and cus...

eWorkshop Hosting - The More Effective Way to Build Your Business with Online Ed - More and more companies are using eWorkshops to reach out to customers, prospects and employees. An ...

eWorkshop Publishing From Net-Teams - As many people are discovering, self-publishing is a time consuming venture, which takes time away f...

What is Social Media Management And Why Is It So Critical? - Whether or not you have a customer relationship management (CRM) system in place, there is one key r...