Guest Post: Getting More Money

Getting More Money

If you are faced with a decrease in income, then a second mortgage might be the answer. You can often apply for a second mortgage if you make all of your payments on time. There are a few steps in the application process before you are approved, and there are some ways that the mortgage refinance rate is calculated. 

One of the things to keep in mind is that many lenders want to see some kind of equity built in the current home before giving another mortgage to buy a bigger home or upgrade the current one. Many lenders will want a security in the home in the event that the loan falls through. The second mortgage is simply a small amount that you might be able to borrow based on how much your home is worth. If you already have a mortgage, then the amount that you are eligible for will be deducted from the original amount. This will leave you with the amount that you could borrow as long as your credit and income are sufficient. Most lenders will base the loan on 80 percent of how much the home is worth. This is why more equity in the home can result in a bigger loan. 

Many people take out a second mortgage in order to lower monthly payments. The interest rates are often lower, especially if they were at a high point n the economy when the first mortgage was taken out. There is a possibility with the new rates that there won’t be a need for any money to be paid up front. The lender will need to know why the money is needed. Most people use it to buy a bigger home or even a smaller home if they don’t need the one they currently have. This situation is often seen when children move out of the home and the couple doesn’t need as many bedrooms, so they decide to get something smaller. The loan can be used for college expenses, transportation or medical emergencies. Rates are calculated based on how much is needed, the current interest rates and how much equity is built. Credit and income are sometimes factored into the rates.