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If you are currently satisfied with your first mortgage, it may be possible to obtain a second mortgage. A second mortgage is defined as: A second lien created on a properties title. In addition, a second mortgage usually is a smaller loan amount than the first, and generally carries a higher interest rate.

  Second Mortgage Loan Programs

Second Mortgage Definition

If you are currently satisfied with your first mortgage, it may be possible to obtain a second mortgage. A second mortgage is defined as:

A second lien created on a properties title. In addition, a second mortgage usually is a smaller loan amount than the first, and generally carries a higher interest rate.

Second Mortgage Cash Out Refinancing

In addtion, a second mortgage is usally obtained to cash out one's equity in their house. At Eminent Mortgage Design, Inc. we can give cash out for any reason, but some common examples are:

Second Mortgage-Private Mortgage Insurance Refinancing

Another reason why second mortgages are taken out are for customers who decide they do not want or no longer need mortgage insurance. For instance if a person's mortgage scenario was:

Loan Amount: $200,000
Interest Rate: 7.5%
Mortgage Payment: $1398.43
Mortgage Insurance: $161.66
Total Payment: $1560.09

You could break it up into two loans, with the scenario of:

First Mortgage: $160,000
Interest Rate: 6.5%
Payment: $1011.31
Second Mortgage: $40,000
Interest Rate: 9.5%
Payment: $336.34
Total Payment: $1347.65

As a result, it is possible to break up a 100% loans into two loans to save money. Although if part of the savings is a result of foregoing the private mortgage insurance, it is important to realize as with any insurance the possible "cons" to that decision.

Second Mortgage Programs

A second mortgage can taken out for a variety of reasons. After you have determined your goals, the next important question is to look at the types of programs.

Fixed Rate Second Mortgages

  • Available in amortization schedules of 5,10,15, 20, 25, and 30 years
  • Cash out is provided in full at closing
  • We offer fixed rate second mortgages up to 125% LTV (loan-to-value)

Home Equity Line of Credit (HELOC)

  • This program is tied to prime, and the payment is based on prime+margin
  • The payment changes when prime changes
  • Your equity can be drawed upon at anytime, repaid, and redrawn
  • You are generally given checks and credit card to use your equity
  • We offer HELOC's up to 100% LTV

Home Equity Line of Credit w/ Fixed Rate Option

  • Posseses all the criteria of the HELOC category above
  • Provides the client the option to lock the drawn amount into a fixed rate

Important Decisions To Consider When Obtaining A Second Mortgage

  • What are my goals?
  • What program will fit my needs?
  • Can I save more through obtaining a second mortgage or refinancing the total balance?
Some of these questions you will be able to answer on your own, the rest will undoubtedly need to be answered through speaking with a mortgage specialist. Apply online or call today for a no obligation quote!


 
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