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Getting to Know Second Mortgage Loans
Thinking about getting a second mortgage loan can be overwhelming, more so when you don’t know where to start in order to apply for a second mortgage. Perhaps you’re wondering whether you’ll qualify or not, maybe you’re not sure whether applying for a second mortgage would be a smart decision for you, or maybe you want to save up and at the same time, find the best second mortgage provider for you. We aim to help and provide you with this information below!
What is a Second Mortgage?A second mortgage is a type of loan that is backed by your home equity and that you take on top of your primary mortgage. A second mortgage allows you to tap your home equity via a lump sum without having to sell your home. It is important to note that payments for a primary and second mortgage are separate and both must be paid by the homeowner.
Generally speaking, a second mortgage has a higher interest rate than a first mortgage because lenders face more risks by financing second mortgages. In the event that the homeowner got into financial trouble, the primary mortgage is still likely to get paid and the second mortgage won’t be a priority, hence the ... more
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