Mortgage Broker Calgary Blog

Are you finding it hard to keep up with your bills and finance your lifestyle? If so, you might be considering taking out a second mortgage. However, second mortgages are often misunderstood, and there are several myths surrounding them that make it hard for homeowners to make the right decision for their circumstances. While talking to a qualified mortgage broker in your area can help separate the truth from the fiction when it comes to second mortgages, you might also find the following information helpful:

Common myths about second mortgages, debunked

1. Only those with no other possible options take out second mortgages

   This is absolutely not true! To qualify for a second mortgage, an individual must own a home with enough equity available to borrow against, and if you’re someone who has no other financial option, there’s a strong chance you won’t own your own home.

   Even for those who may not necessarily be struggling financially, but would like to release some home equity to fund a renovation project or even buy another home, a second mortgage can be a great option.

2. Second mortgages – they’re way too complex!

   The concept behind second mortgages is in fact, pretty simple: if you own your own home and have a substantial amount of equity available, you can turn it into cash, to do whatever you want with. The money from your second mortgage can be received in a single, lump sum, or in monthly payments; a lot will depend on your preference and your lenders terms and conditions.

   However, should you find the process to be at all confusing in any way, or would like to discuss whether a second mortgage is right for you, an experienced mortgage broker will happily talk you through your options and simplify the entire process.

3. The money from a second mortgage, can only be used for certain things

   Again, not true at all! This common myth has long been deterring homeowners from taking out a second mortgage, but it’s completely false. When it comes to how you use the money from a second mortgage, there are absolutely no restrictions placed upon you at all. Because the home equity belongs to you, nobody can tell you what you can or can’t use the money for, and whether you want to pay off a debt, buy a new car, renovate your home or pay for emergency medical fees, the money is yours to do with as you wish.

Now that you’ve seen what isn’t true about second mortgages, perhaps it’s time to sit down with your mortgage broker and have a serious conversation about whether a second mortgage could be the solution to your financial woes.

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