Should You Get a Second Mortgage?
Updated: Aug 12, 2021
If you’re looking to consolidate debt or fund a home remodeling project, getting a second mortgage may be a good idea. However, you’ll need to consider what taking out a second mortgage really means before you make that decision.
Is it a good financial decision? Before you do anything else, you should sit down and consider if it’s the right financial decision for you. Is taking on extra debt beneficial to you at this point in time? Will a second mortgage put a strain on your finances? What is your financial outlook over the next few years? Answering these questions honestly is critical. Before pulling the trigger on a second mortgage, make a good budget so that you can determine if having a second mortgage is a good move.
Choosing the right lender. Taking out a second mortgage means that you will be borrowing against the value of your home so it’s essential that you choose the right lender. You’ll need to carefully research your options ahead of time so that you make the right decision. Although choosing the same lender that you went through for your home mortgage isn’t a necessity, it can often be a good idea as you do have an existing relationship them. If nothing else, it won’t hurt to pick up the phone and talk to your mortgage professional about your options for getting a second mortgage.
Know the costs involved. Since your lender will be taking on more risk, the costs of a second mortgage are usually higher than those on your first mortgage. For budgeting purposes, it’s important to know this and you’ll need to ask your mortgage professional about how much a second mortgage will cost you. Interest rates are at or near record lows, so that may work in your favor in terms of whether or not you can afford to take on a second mortgage.
In the end, there are certainly a number of financial risks associated with getting a second mortgage and you’ll need to think carefully about these risks. For more information, talk your mortgage professional.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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