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A Second Mortgage That Isn’t a Mortgage? What’s the Deal?

With the most recent changes to mortgage lending/borrowing rules, those established by the Canadian Mortgage and Housing Corporation, coupled with a higher interest rate, many Canadians looking to refinance their mortgages are finding it much harder to do so than originally anticipated. While a second mortgage offers a chance to access significant equity to use for whatever you need, it may no longer be as easy to get as it used to be.

So, when you’re looking to access some of the equity in your home that you’ve worked hard to build, but seem to continually be hitting a brick wall, what’s the answer? How about a second mortgage that isn’t a mortgage at all?

Sorry, what? If it isn’t a second mortgage, what is it? We’re glad you asked. If you have significant equity that you want to use for some home renovations, your child’s education, or just to consolidate some debt, you can easily do so with a home equity personal loan.

An unsecured home equity loan is a personal loan that is approved based on your home equity. Home equity is the market value of your unencumbered interest in your real property – the difference between your home’s fair market value and any outstanding balance of all liens on the property. The property’s equity increases as you make payments against the mortgage balance, and/or as the property value appreciates. For example, if your home is valued at $400,000, and your current mortgage balance is $200,000, you have $200,000 in home equity.

The beauty of a home equity personal loan is that you can access some of that equity without the loan being registered against your home, only one homeowner has to sign, and there are no legal fees, appraisals to pay for or closing costs to cover. They are much faster to arrange that traditional mortgages and have fixed interest rates so, even if the interest rate goes up once more, you’re protected.

Keep in mind that, to qualify for a home equity personal loan, you need to have significant equity – usually around 50%. You should also have good credit history. Both work together to signify your stability and ability to meet payment requirements.

Prudent Financial offers the perfect second mortgage option – one that isn’t actually a mortgage. Have significant equity and good credit? We can get you set up with a home equity personal loan in as little as one day!

Call us today at 1-888-852-7647.

 

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