Second Mortgage Home Loan

Second Mortgage?
These types of loans are based on the value minus liens on your home. Interest payments on a second mortgage may be tax deductible. They come in two varieties: the traditional second trust deed and home equity line of credit. A great way to payoff debts. A way to pay bills over a long period of time. It's much better than one mortgage with (a high LTV) PMI included. The best type of second mortgage is the home equity line of credit that has a lower interest rate, you pay interest only, and is open as long as you want. It's a great way to access your money. Another great thing is to avoid PMI.

Second mortgages are called subordinate because, if the loan goes into default, the first mortgage gets paid off first before the second mortgage gets any money. Thus, second mortgages are riskier for the lender, who generally charges a higher interest rate.

The advantages of equity line of credit includes:

• Low interest rates because (a) secured by a house, and (b) it usually bears a variable rate.
• Closing cost fees are less than $750.00 for (appraisal, title work and closing).
• No loan processing fee. There is no need to go through an application and incur fees each time money is borrowed.
• Convenience. A check may be written only when money is needed. Interest is charged only on the amount borrowed.

Here are things to consider on a home equity line of credit: See Programs

• No origination or discount points imposed on a home equity line of credit and is based on the amount of the credit line, not on the amount actually borrowed. Home equity line of credit is usually based on prime rates.
• Long payback period. It is convenient to have to pay a small minimum amount each month, but stretching out the financing payback period usually helps in freeing up your money.

Here are pitfalls of a secondary financing:

• High balloon payment. Some financing require a large balloon payment of the principal at the end of the finance period.
• Risk of home loss. Unlike other financing, there is risk of losing a home. It may be difficult to sell the home fast enough and at a fair market value to be able to meet the balloon.
• Frivolous spending habit. One may get into the habit of spending on unnecessary things.

Equity line of credit is commonly used for?

• Debt Consolidation to Lower Payments
• Pay for home improvements
• Pay for major purchases
• Pay for education costs
• Investments
• Operating capital for business

Equity line of credit interest may be tax-deductible (Consult your tax advisor) and it can even lower you monthly debt payments when you use it for debt consolidation.

Other Exclusive Benefits:

• Low introductory rate
• Revolving line of credit accessible by simply writing a check or using the Lender Platinum MasterCard®
• 20-year term to meet your needs both now and in the future
• Interest-only payments based on your outstanding balance—you only make payments on the amount used.
• Fixed Rate Lock Option, which allows you to lock in a fixed rate, fixed term and fixed payment on a portion of your equity line of credit
• 24-hour online access, automatic bill payment and more

A second mortgage is a secured loan that is subordinate to another loan against the same property. In real estate, a property can have multiple loans against it. The loan which is registered with the county or city registry first is called the first mortgage.