Berkshire Hathaway EWM Realty.
Adelaida “Ady” M. Artime, P.A., Berkshire Hathaway EWM Realty.Phone: (786) 512-2467
Email: [email protected]

Second mortgages - Are they worth it?

by Adelaida “Ady” M. Artime, P.A. 05/26/2024

Major pros & cons of a second mortgage  featured image

A second mortgage grants homeowners the ability to borrow equity from their home to gain financing. These funds can be used to pay bills, enhance the property and more. 

The second mortgage is connected to the equity your current mortgage has built up, so it’s crucial to understand the ins and outs of a second mortgage before deciding to use it. 

Advantages & disadvantages of a second mortgage

Advantages 

  • Lower interest rates in comparison to standard lines of credit. 
  • More financial wiggle room to invest in larger home renovations. 
  • You can use your homes’ equity without having to refinance the original mortgage. 

Disadvantages

  • Your mortgage lender may require a high credit score and debt-to-income ratio to qualify. 
  • Your home may be at risk if the home equity line isn’t paid back within contract guidelines. 
  • If you decide to sell your home, you may make less profit. 

How do I get a second mortgage & what should I expect?

To take out a second mortgage loan, most lenders require a decent amount of equity to be built up on your home which is the amount you’ve paid towards the principal balance (the cost of the home plus interest). 

After taking out the second line, you’ll need to have at least 20 percent equity still built up on your home. If you need this money fast, please note, it takes a few weeks for lender approval and the loan comes with fees. 

If you’re unsure a second mortgage is for you, speak with your lender to explore your options and make adjustments as needed.

About the Author
Author

Adelaida “Ady” M. Artime, P.A.

In her role as a real estate and relocation specialist in South Florida and Northern Virginia, Ady Artime prides herself on providing the highest level of service, confidentiality and professionalism to her clients. Based on her own experience as a government liaison, Ady is in familiar territory working with high powered individuals. She possesses a discreet and confidential work ethic, and her keen eye, attention to detail, and experience with multi-million dollar properties have earned her a high-profile, loyal clientele that expect the best from their realtor.

Known for her expertise and strong background in interior design, she stands out from other real estate agents. When a satisfied client says that Ady knows real estate "inside and out", the statement is to be taken literally. Over the course of her career, she has received recognition as an award-winning interior designer. She has designed and implemented interiors for countless luxury projects throughout the United States, and Europe. Her extensive knowledge of all facets of design, including working with architects and construction teams, led to a natural progression into the real estate arena and gives her a definite edge over the competition in serving her clients.

As and agent in South Florida and North Virginia, Ady lends her real estate expertise and design savvy to buyers and sellers. Ady's mission is to develop a faithful, repeat clientele by providing them with superior service and value. She is passionate about her work and takes the time to understand each client's needs and goals to accurately assess the options she provides. From overseeing the staging of a listed property in order to fetch the highest possible price to analyzing a potential purchase from a design and architectural perspective.