Second Mortgage FAQs
Times have been hard for everyone affected by COVID-19, mentally, physically, and financially. That's for sure! Hang in there and know that you can get through it. Financially speaking, some have had a hard time keeping up with their bills, including rent or mortgage payments. You may even be considering taking out a second mortgage on your house. While this isn't for everyone, it can be the answer for some people. That being said, our mortgage company at the Lake of the Ozarks is here to answer a few frequently asked questions about second mortgages in this week's blog. We want you to have all the information upfront so that you know what you're getting into. If this is something that interests you, please call MHQ - Mortgage Headquarters today and get your questions answered by an experienced mortgage lender at the Lake of the Ozarks.
Q: What is a second mortgage?
A: By definition, a second mortgage is any loan that involves a second lien on the property, but you generally have two options: a home equity loan or a home equity line of credit. Both options combine your first and second loan, so your loan will be limited to 75 to 80 percent of your home's appraised value. With a home equity loan, you borrow a lump sum of money to be paid back monthly over a set time frame, much like your first mortgage. However, the closing costs (often 2-3 percent of loan amount) are often higher than your first mortgage and the rate - usually fixed – is also higher.
Q: What is a Home Equity Line of Credit?
A: A home equity line of credit (HELOC) is an open line of credit tied to an equity-based maximum loan amount. You may use the account for a set period of time (5, 10 or even 20 years) as long as there are funds. Once your predetermined time period is up, you will be required to pay off the loan, making monthly payments on the principal and interest. The interest rate can fluctuate month to month on a home equity line of credit, which makes this option appealing when interest rates are low, but risky when interest rates increase.
Q: How do I decide what type of loan works best for me?
A: When deciding what type of loan is best for you, it is important to consider how you will use the money and how you intend to pay it off. Do you need money in one lump sum or intermittent over several months or years? Do you want a fixed interest rate so you can repay your loan in precise monthly installments or would you rather have the flexibility to make any size payment above the interest-only minimum? In today’s competitive market, there are many options available. We will help you find the right mortgage product for your lifestyle and financial needs.
MHQ - Mortgage Headquarters is here for you. Give us a call today and schedule an appointment to get every question you can think of about second mortgages answered by someone you can trust to give you the information you need. We can be reached at the number listed below and you can also follow us on our social media channels listed below to stay up to date on our latest announcements.
Second Mortgage FAQs
Q: What is a second mortgage?
A: By definition, a second mortgage is any loan that involves a second lien on the property, but you generally have two options: a home equity loan or a home equity line of credit. Both options combine your first and second loan, so your loan will be limited to 75 to 80 percent of your home's appraised value. With a home equity loan, you borrow a lump sum of money to be paid back monthly over a set time frame, much like your first mortgage. However, the closing costs (often 2-3 percent of loan amount) are often higher than your first mortgage and the rate - usually fixed – is also higher.
Q: What is a Home Equity Line of Credit?
A: A home equity line of credit (HELOC) is an open line of credit tied to an equity-based maximum loan amount. You may use the account for a set period of time (5, 10 or even 20 years) as long as there are funds. Once your predetermined time period is up, you will be required to pay off the loan, making monthly payments on the principal and interest. The interest rate can fluctuate month to month on a home equity line of credit, which makes this option appealing when interest rates are low, but risky when interest rates increase.
Q: How do I decide what type of loan works best for me?
A: When deciding what type of loan is best for you, it is important to consider how you will use the money and how you intend to pay it off. Do you need money in one lump sum or intermittent over several months or years? Do you want a fixed interest rate so you can repay your loan in precise monthly installments or would you rather have the flexibility to make any size payment above the interest-only minimum? In today’s competitive market, there are many options available. We will help you find the right mortgage product for your lifestyle and financial needs.
Get Your Questions Answered By The Best!
MHQ - Mortgage Headquarters is here for you. Give us a call today and schedule an appointment to get every question you can think of about second mortgages answered by someone you can trust to give you the information you need. We can be reached at the number listed below and you can also follow us on our social media channels listed below to stay up to date on our latest announcements.
Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
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