Taking a private mortgage on your Richmond Hill home is a big choice, and when done wisely it can come with great financial benefits. But a private mortgage can be used for more than the first mortgage on a home. Considering a private mortgage as a second mortgage is a great choice, and can help ease serious financial tension. 

 

 

A second mortgage is simply another loan taken out on the value of the home. Second mortgages do not replace the first mortgage taken out on the home; rather, they both exist at the same time. Many people take out second mortgages for financial expenses they cannot afford otherwise, like house repairs or schooling fees.

 

Often, people prefer to take out a second mortgage rather than using a line of credit or credit cards as a way to access money they do not have. Lines of credit are usually provided through a bank, a place where mortgages also originate. Though lines of credit can be a strong financial choice for many, they do not always offer the same large sums of money as second mortgages do. Similarly, credit cards have many restrictions that second mortgages do not. With strict maximums and high interest rates, credit cards can be too limiting for those who need the high amounts of money that second mortgages can offer. Unless someone is financially well off enough to be offered a limitless credit card, they are not always the best choice.

 

 

Taking out a second mortgage through a traditional Canadian bank can be a difficult and stressful process. Banks do not make it easy to borrow money without high interest and penalties, especially when one loan is already taken out. Banks can also monitor the finances going in and out of accounts, and take this money into consideration when giving a second mortgage.

 

Private mortgage companies offer mortgages of a significant size with very little investigation into your credit score or bank statements. These mortgages can be short term or long term, which means that if the loan is only being used for a small project that can be paid back quickly, you will not be tied into a long contract. The interest rates on private mortgages can be significantly lower than that of the competition, be it lines of credit or credit cards. Because the mortgage does not have to be long term, borrowers do not have to worry about the loan existing on their credit score even after it has been paid back.

 

Taking out a private mortgage as a second mortgage on your Richmond Hill home can be a great choice. Not only are they more financially practical than lines of credit and credit cards, they are also not attached to a traditional bank. The loan can quickly be added and paid back, and will not be tied to someone’s name long after it is paid back. Private mortgages can be a great way for Richmond Hill homeowners to improve a poor credit score, and when used carefully, can be a strong financial choice.