Getting a second mortgage in Toronto can help you to access the equity in your home that you have been accumulating over the years, and it is a much more affordable option than many other types of loans. At Circle Mortgage, our experienced mortgage brokers can help you determine if a Toronto second mortgage is the right choice for you and match you with the appropriate lender.
A second mortgage is a secured loan that uses your home equity as collateral. To calculate your home equity, take the value of your home today and subtract what you still owe on your home. Most lenders will allow you to borrow up to 80% of your home equity through a Toronto second mortgage.
When you apply for a second mortgage, you won’t have to break your current mortgage. The second mortgage is a second loan that you pay off in addition to the first. Just like the first mortgage, you will be required to make regular payments with interest for the term of the loan. At the end of the term, you will have the choice to either pay off the remaining balance in full or to renew the loan for another term.
There are many reasons why Toronto residents may choose to get a second mortgage. Some choose to get a Toronto second mortgage in order to consolidate debt. Since second mortgages typically have lower interest rates than other types of loans, a second mortgage can be an excellent tool to consolidate debt, lower the amount of interest you are paying and even to get out of debt faster.
Other reasons for getting a second mortgage in Toronto including financing home renovations, to get start-up capital for a business venture, to pay for education, or to get a down payment for a second property. Really though, you may get a second mortgage for any reason you choose.
The main qualifying factor if you are considering a second mortgage is that you have sufficient equity in your home to cover the loan. In some cases, you may have to have a home appraisal to confirm the value of your home. Having good credit will help you to qualify for a better interest rate however your mortgage broker can help you find options for a bad credit second mortgage in Toronto if necessary.
The process for getting a second mortgage in Toronto is very similar to the process for getting a first mortgage. You should start by making an appointment with your mortgage broker. Your mortgage broker will assess your situation and match you with the appropriate lender.
At that point, your mortgage broker will give you a list of the documentation required for your application which will generally include financial records, pay stubs, etc. Once these are collected, your mortgage broker will fill out the application on your behalf, have you sign it, and send the application to the lender.
If you are a homeowner and you are looking to borrow a large sum of money, then a Toronto second mortgage may be the ideal solution for you. Not only are the interest rates lower than other types of loans, but because this is a secured loan, you won’t need to have perfect credit to qualify.
If you think that getting a second mortgage in Toronto might be the right option for you, contact us today to speak to one of our mortgage brokers.