Considering A Second Mortgage?
Get The Facts First!

If you own the property that you live in and need money for home improvement or to pay off debts, you can apply for a second mortgage. This type of mortgage, also called a home equity loan, allows you to borrow money against the equity that has built up in your home. Home equity loans, like other loans, are not to be taken lightly. However, in times of need, second mortgage loans are a good option.

Second mortgages have several advantages over other types of loans. The interest rates on equity loans are much, much lower than with other types of loans. In addition, the interest you pay on this type of loan can be tax deductible. You can also borrow larger amounts of money with an equity loan than you would be able to with a personal loan.

There are a lot of online lenders out there competing for your equity loan business. Keeping this in mind, it is best to choose your lender wisely. Any lender who pressures you into borrowing more than you need is just out for a big commission. Shop around and get recommendations from friends or coworkers. Also, look for the best APR rate for your credit rating and circumstances. The lower the APR, the lower the cost of your loan will be.

Once you do choose an online lender, discuss your financing needs with your loan representative. Make sure you know about all of the details of the loan, such as the APR rate, terms and penalties. Before you sign any paperwork, have your attorney review the agreement and make sure everything is legit.

After you have signed your paperwork, you do have an out if you decide that the equity loan is not right for you. According to the Lending Act, you have at least three days after closing to cancel the loan if you choose to do so. In order to “rescind” the loan, you must notify the lender in writing. This protection helps consumers get out of a second mortgage if they have second thoughts.