A second mortgage is basically a secured home loan taken out on your home by the homeowner prior to fully paying off his first mortgage. Instead of just paying off the first mortgage and keeping the cash for yourself, you pay off the second mortgage with another payment that is less than the balance of your first mortgage. With a second mortgage Ontario, homeowners are able to borrow money against the equity within their house, without refinancing the existing mortgage. Here are some tips that will help you get a second mortgage in Canada.
Shop around and compare rates and terms. You can choose to use online mortgage quotes or look into lenders who do not charge a fee for an appraisal. In either case, you want to get several different quotes so that you can find the best deal. It is important to compare the amount of money that you will have to pay to get your loan as well as the interest rate. Remember, you may pay a little more than the regular interest rate, but this is generally a worthwhile investment considering the amount of money that you could potentially save in legal fees or the appraisal fees.
Be organized. Before you apply for your second mortgage in Canada make a list of all the documents that you need, such as income tax returns, ownership certificate, lease agreement, and mortgage lien certificate. In addition to these documents, you'll also need to present a recent statement from your bank showing your current account balance and your credit rating. Have all of your documents in order and ready to present to a potential lender. In addition, having all of your documentation in order and in good condition will help you qualify for the lowest interest rate possible.
Build your credit history. If you have a good financial history with your current employer, have recently obtained credit cards with a minimum of outstanding balances, and have not defaulted on your loans or credit cards in the past five years you will have a good chance of qualifying for a second mortgage in Canada. In addition, your ability to make payments will also be factors taken into consideration by your lender. For instance, if you are unable to make payment on time to any of your existing loans or credit card accounts you may not be able to get approval for financing through a second mortgage in Canada. As a result, it is important to build up some emergency cash by saving money, paying down debt, and building your credit history.
Use a broker. If you are unfamiliar with the process of applying for second mortgages in Canada, you should consider using an accredited broker with experience in the field. Licensed brokers will have thorough knowledge of the laws, regulations, and qualifying requirements for both Canadian residents and non-residents who wish to take advantage of the equity within their property. Using a broker will also help you to avoid any costly mistakes that non-licensed individuals often make. This is especially important because many applicants fail to understand the true cost of interest rates on second mortgages in Canada.
Use the Internet. It can be difficult to assess the value of your home without an inspection. A virtual tour of your home can give you a better understanding of its condition and show you which areas need the most attention. Obtaining a second mortgage in Canada is one of the best options for those homeowners who fear losing their house to foreclosure but do not have good credit. Find more info at https://en.wikipedia.org/wiki/Second_mortgage