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Second Mortgages: Pros and Cons

Sep 24th 2015 at 4:10 AM

As people say home is a place where your heart is, but as people in Barrie add, home is where the money tree grows and a lot of them understand the idea of second mortgages under the words of “money tree”.

 

Second mortgages are just like other types of a loan, they are drawn against the equity in a home in addition to the first existing mortgage. As a rule, second mortgages in Barrie are divided into two groups: the first one is the home equity line of credit, also known as HELOC. It actually works as a credit card and by that allows you to get as much money as you need and whenever you need it. The other kind of second mortgages is the fixed-rate home equity loan. With this mortgage you get a lump sum of money. But unlikely to the previous option, this type of second mortgages has fixed interest rate and a set repayment schedule.

 

Pros, Pros, and… Pros

Second mortgages have a lot of positive sides available for anyone in Barrie. To begin with, you can always have quick access to the needed cash at a pretty favorable interest rate. As a rule, second mortgages lending institutions in Barrie offer these mortgages at very good interest rates, depending on the client’s credit history and the interest rate climate. And in fact your loan payment is offset by the idea that the interest paid on the mortgages may be tax deductible.

 

If you want to compare regular loans to second mortgages, then you will see that rates on these funds usually approach double digits, and they can pretty often be laden with service charges and hidden fees if talking about loans. Second mortgages are relatively inexpensive to close in Barrie companies, and the money you get you can always use for whatever you need.

 

Be Careful with the Cons

Forewarned is forearmed, so take the following cons of second mortgages into account and just make sure you avoid them if applying. One of the biggest drawbacks of second mortgages is ironically also its strength. You know that Barrie lenders are usually happy to provide you with a second mortgage, and you as a borrower tend to tap more than you really need. Exactly because of this “greediness” you may get into a real pickle if decide to move or if your interest rates increase.

 

The bottom line of the article about second mortgages according to Barrie experts – watch your personal bottom line. Home equity sometimes feel to borrowers like money growing on trees; but you should always be careful with your wills! Take only that what you need, and make sure that your monthly payments work for you.

 

Melissa Bailey is established as a reviewer for a big array of online publications (featuring businesses like CanadaWF.com), who shares opinion on various second mortgages in Barrie subjects and other areas alike. A tireless explorer of internet space and an opinion builder in all things related to the second mortgages in Barrie.

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