A Second Mortgage_ Vs. A Home Equity Loan
by Jay Moncliff
Tip #1 One Time Expenses. A second mortgage_ is the preferred option if you have a one time big expense you need to cover. Examples of this include remodeling your kitchen, paying for a wedding, or buying a new car. In these instances a second mortgage_ will probably work best for you; however this will depend on the equity in your home and your credit score.Second Mortgage_
Tip #2 Recurring Expenses. If you are going to have recurring expenses then you might not want a second mortgage_ because a home equity loan will work out better for you. The second mortgage_ is best for large amounts of money at once while recurring expenses like tuition are better paid for with a home equity line of credit.Second Mortgage
Tip #3 Repayment. You will also need to consider your ability to repay and which option will suit you best. A second mortgage_ can be financed similarly to your first mortgage, while the home equity loan can be paid back more like a credit card. Consider your financial position and ability to make monthly payments before applying for either a second mortgage_ or a home equity loan.If you still don’t know whether a second mortgage_ or home equity line of credit is for you, then talk with your lender and see what is recommended for your equity, credit, and ability to repay the loan.
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