HELOC/ Second Mortgage Loan
For many, accessing their home’s equity as cash can be crucial to making the short-term moves that lead to long-term stability. A HELOC or second mortgage may help you do just that by letting you take out a loan on a home that already has a mortgage. In doing so, you’re able to access your home’s equity as cash to help you meet whatever your goals may be.
Uses Of A HELOC/ Second Mortgage
Credit cards are incredibly convenient, but with high-interest rates, they can also quickly lead to a massive amount of debt. A HELOC or second mortgage may help you pay off those high-interest credit cards, personal loan obligations, and others, thereby consolidating them into your mortgage. Compared to many other kinds of debt, mortgages tend to have extremely low-interest payments.
Consider these benefits of consolidating your debts with a second mortgage:
- Eliminate the interest payments you’d make each month.
- Reduce the impact of your cards on your credit score.
- Get a chance to start fresh and build better credit card habits.
Two Types Of Second Mortgages
There are generally two kinds of second mortgages available: a Home Equity Line of Credit (HELOC) loan and a home equity loan.
A Home Equity Line of Credit (HELOC) loan works like a line of credit. Rather than a lump sum, a lender will offer you revolving credit that you can use to make purchases. Think of it as a credit card, but your equity is the limit. Once you’ve used some of that cash, you’ll be required to pay it back. After you do, you’ll have it available again to spend.
A home equity loan takes your equity and gives it to you in a lump sum that you can use for any purpose. Like your first mortgage, you’ll be required to pay that amount back over the course of a stated term.
Contact us today to learn how a second mortgage can help you reach your goals.