Westmark Credit Union
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What Is a Second Mortgage and Is It Right for You?

Do you need to fund your child’s college education? Or perhaps you’re planning a room addition for your home? When it comes to finding financial help for large expenditures like these, many homeowners consider getting a second mortgage. Read on to learn what this type of loan is and if it may be a good option for you.

Second Mortgages

Just like a first mortgage, a second mortgage is a loan that you can get from a lending institution, such as a credit union or bank, for which your home would serve as collateral. However, while a first mortgage acts as a loan to buy the property, the second one offers individuals a way to pay for other significant expenditures, such as emergencies or investments, that may otherwise be difficult to fund. Also, these loans can be used to pay off outstanding debts that have higher interest rates than the second mortgage. In most cases, second mortgages are for smaller amounts and have higher interest rates than first mortgages.

Important Considerations

As you can see, second mortgages can offer many benefits. However, there are several important factors to consider when determining if this type of loan is right for you. First, you are putting your home on the line when you get a second mortgage. This means that if you are unable to make your mortgage payments, then you may lose your home through foreclosure. For this reason, a second mortgage is probably not worth the risk if you need funds for everyday living or entertainment purposes. Additionally, getting a second mortgage can require various fees, plus you will be paying interest with each payment until the loan is paid off. If you are confident that you can make the payments for a second mortgage, and that what you can do with the funds is worth the associated risk, then a second mortgage may be right for you.

If you’re interested in applying for a second mortgage in Idaho, then please call Westmark Credit Union today at (208) 523-1071.

Categories: second mortgage

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