Canadalend.com is a trusted name when it comes to assisting residents of Toronto, Brampton, and Mississauga, as well as many other Canadian cities, in securing second mortgages. Our team of experts helps to cut our customers’ monthly payments on second mortgages in half. Don’t pay minimum payments on credit card bills, car loans, and other unsecured debt when you’re only paying off the interest.
Second mortgages can be used for:
- Consolidating debt
- Covering home renovation costs
- Paying for children’s education
- Repaying mortgage and tax arrears
- Having disposable cash on hand
Second Mortgages Explained
Put simply, second mortgages are loans against the equity in your home. Canadalend.com offers clients advice for solutions on second mortgages for debt consolidation, investing in a small business, and post-secondary education for your children, as well as the unexpected costs that come up from time to time.
Mortgages in Canada are claims on a property that the owner of the property gives to a lender for security on the money being borrowed. In fact, you do not go to a bank or lender to “get a mortgage,” you go there to “give a mortgage” in order to secure the money to buy a house. If you’re looking to buy a home in Toronto, Brampton, or Mississauga, think of a mortgage as a document you give to a lender in order to get money.
Typically, Canadians borrow money from a financial institution or private lender to purchase or finance their home. As a result, most Canadian homeowners have at least one mortgage registered against their home. The borrower promises to pay back the amount to the lender in small installments over a set period of time at regular predetermined intervals.
A property may have several mortgages on it, though having more than two is rare. The rank of the mortgage is determined by the order of the date on which the homeowner borrowed the money. First mortgages are followed by second mortgages, then third mortgages, and so on as necessary. If the homeowner fails to repay the amount that was agreed upon, the loan falls into default.
A lender may have the right to repossess a property in order to pay off the mortgage if all other legal options to return the payments to good standing have failed. The rank of each mortgage determines the order in which the mortgages are paid out; second mortgages and the ones that follow have a higher risk of being paid out, depending on the equity in the sale of the property. For this reason, second mortgages and beyond often have a higher interest rate.
Second Mortgages: How Much You Can Borrow
The amount available to homeowners for second mortgages depends on the equity they have in their house. Home equity is the value of your home minus all the debts you have against your home. If you want to calculate the equity in your home, look at the following example:
Let’s assume your home is valued at $500,000. Canadalend.com can help provide you financing of up to 90% of this value—in this case, that’s up to $450,000. Let’s assume you’ve borrowed $300,000 against this already. This leaves you with the option of securing a second mortgage of up to $150,000!
Using Low Rate Second Mortgages for Financial Aid
Second mortgages come with a fixed interest rate that is usually lower than most credit cards, making it an attractive option for those looking to control their spending. This way, you can meet your expenses through a more controlled means than credit cards, which carry the risk of overspending. Second mortgages are beneficial to those paying off multiple debts or who need cash immediately.
Using Second Mortgages to Consolidate Multiple Debts
Second mortgages are one way to wisely consolidate multiple debts, and Canadalend.com offers ways for clients to do so. If you’re feeling overwhelmed by bills and multiple debts, a second mortgage is one option you may want to consider. By cutting down on the amount you’re paying at the end of each month, you’ll have a better cash flow. Another advantage of consolidating your loan is that it will allow you to decrease your rate of interest, which, in turn, will help you save money in the long run.
Using Second Mortgages for Home Improvement & Renovation
Often, your monthly bills may leave you with little disposable cash for projects such as home renovations and improvement. Second mortgages provide another option for paying for much-needed repair work and/or renovations to improve the look of your home. Second mortgages let you use the equity in your home for improvements, thereby increasing the value of your home without stretching your monthly budget too thin. Best of all, should you decide to sell your home, you may get well above the asking price with the right improvements. You can also keep your monthly payments at a lower rate of interest than conventional credit loans by selecting the right second mortgage solution.
Using Second Mortgages for Educational or Emergency Expenses
Second mortgages offer homeowners a way to pay off student loans or pay for their child’s continued education. Since it comes at a much lower interest rate, this is often a better option than an education loan. As long as the education costs are within the equity of your house, second mortgages will cover them. Second mortgages can also come in handy if you need cash in a hurry, as they allow you to spend a portion of the equity in your home; however, since you set the amount of the portion, you won’t overspend. Second mortgages eliminate the risk debt accumulation and overspending that come from using credit cards to pay off emergency expenses.
Ultimately, opting for a second mortgage with help from Canadalend.com may just be your best bet for getting out of certain financial situations.