The ins and outs of a second mortgage, courtesy of an experienced legal services provider in Mississauga, ON
During volatile times, when in-between jobs or facing furloughs, credit card debt can pile up. Likewise, as more individuals work from home or desire to make their homes as attractive as possible, they may be facing costly renovations, additions, or upgrades. All these obligations and investments can be satisfied with a second mortgage. However, by its very nature, this arrangement is not without its risks.
It is important to select an experienced real estate lawyer in Mississauga, like Tarunjeet Gujral, to review legal documents with you. Gujral Law Office is well-versed in relevant legal services, ranging from contracts related to property and property transactions, lending, and other forms of financing. He can help you to determine if a second mortgage is in your best interests. Since there are different financing arrangements within the world of the second mortgage, Mr. Gujral will help pinpoint the best option for you and your family. He can also discuss and address any potential drawbacks associated with this type of loan.
Essentially, second mortgages are like a mortgage provided by your bank or a private lenders, only the loan is secured by your home. Specifically, the equity that you have built up through the months or years of making mortgage payments can be put to work to fund any goals or outstanding financial obligations that you may have. In other words, the equity can be accessed when you may need it most. Equity is frequently used to pay for improvements to your home, such as renovations or additions (that she-shed or detached office). Due to our considerable background in real estate, we can also advise on paperwork (city/ municipal permits) that is necessary from a compliance perspective. However, borrowers may also have taken out second mortgages to fund investments such as a child’s college education or to pay down high-interest credit card debt. Since you are securing the loan with your home, the interest rate is significantly less than the average interest rate associated with most credit cards, but is usually more than first mortgage interest.
Some homeowners take pause with second mortgages because their “home” is their castle. And that “castle” is used as collateral. So, just like with the first mortgage, if you fail to pay as a borrower, the bank or lender can foreclose on your property. You must know what you are signing on the dotted line and understand all your options. At the end of day, you are responsible for all the documents that you sign and are bound by it. We encourage you to contact our office today with your questions or concerns about mortgage financing.Back to Real Estate Page