While the words “second mortgage” may initially strike fear into your heart, it may actually be a huge blessing once you get to understand more about this financial option. In many circumstances, a second mortgage or line of credit can help you financially whether you have an unexpected need or want to improve your home with a remodel. Here are some of the top times that you may want to look into a second mortgage.
With a second mortgage through tribeca, you are borrowing against your home’s equity. Many times, this allows you to access a large line of credit because you are using the value of your home as your collateral. In fact, in some instances, you can borrow up to 80 percent of the value of your home, giving you plenty of money for major needs.
Another time you may want to consider a second mortgage is when you are unable to gather enough funds for a down payment. Without an adequate down payment, you may be required to pay private mortgage insurance, which can tack on quite a bit to your monthly payments.
If you are struggling to find a low interest rate, a second mortgage may be the way to go. This is particularly popular among those who wish to consolidate their consumer debts under one umbrella with a lower interest rate than what is offered on most credit card agreements.
Health or personal emergencies may make it necessary for you to find a large amount of money in a short time. A second mortgage or line of credit can help you meet the deadlines for large bills and may even keep you from having to make large payments when you are in financial distress.
Finally, you may be able to get a tax deduction for tax years after 2017 if you take out a second mortgage to make substantial improvements to your home. This money can make it possible for you to build an addition or complete a major remodel or your home, which can significantly improve the value of your home.
Of course, you should always look carefully into your options before you take out a second mortgage. This type of line of credit does not come without some risks, but when you use it carefully and pay it off in the allotted time, it can become a huge benefit for you, your finances and your home. Additionally, be sure that you understand all of the fine print that comes with your second mortgage so that you understand the interest rate, fees and payoff times before you sign.