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2008-03-26 23:17:02
Second Mortgage Loan - Using Your Residence to Increase Your Borrowing Power
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 A second mortgage is exactly as it sounds.
You are adding another company onto your mortgage and in exchange, they are lending you additional money that is secured by the equity in your home. A second mortgage is also known as a "secured loan" because you are providing the equity in your home as collateral.
What are the advantages of taking out a second mortgage versus taking out an unsecured loan? There are many, including:
1. Increased Borrowing Power. With an unsecured loan, you will be lucky to find a company that will loan you over 10k pounds. With a secured loan, you can usually borrow up to 100k, depending on how much equity you have in your home. The exact amount of your borrowing power is determined by this formula:
Appraised Value of Home Minus Outstanding Mortgages = Total Borrowing Power
So, if you own a home that is worth 300k pounds and have a 200k mortgage on the residence, you will normally be able to borrow up to a maximum of 100k pounds.
2. Lower Interest Rates. Typical APR for a "second mortgage"? 8%. Typical interest rate for an unsecured loan? Anywhere from 13-14% on up to over 25%. Calculated over the lifetime of a loan, this is a HUGE difference. Second mortgage companies can offer you much lower interest rates because you are a lower risk, due to the fact that you are offering the company collateral.
3. Flexible repayment schedule. With an unsecured loan, you will normally get up to five years at the max to pay back your loan. A second mortgage or "secured loan"? Up to 25 years, just like a mortgage.
Now you know what a second mortgage is and what the advantages of them are. What can you use a second mortgage for?
A wide variety of reasons, including:
-debt consolidation
-home improvements
-big purchase (car, holiday, etc.)
Banks and lenders will prefer it if you borrow for the purposes of debt consolidation or home improvements. The reason is that they prefer to lend for reasons that will improve the financial situation of the borrower.
Applying for a second mortgage is quick and easy. Simply click this link and fill out our easy to use application form. Applying takes no more than five minutes, and you are under no obligation to take out the loan should you be approved.
Apply for a Lending Place secured loan today!
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Get Your Free Loan Offer Today - Click Here
There is NO FEE and you are under NO OBLIGATION!
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