What Should You Be Using Your Second Mortgage For?

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What Should You Be Using Your Second Mortgage For?
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• While paying off a high-interest consumer loan,
  or financing home improvements with the money
  from a second mortgage, is a worthwhile and sound
  idea, there is a better way to use that money
  make a down payment on a rental property.
• If youve got a second mortgage and are looking
  for the ideal way to invest your money, then
  making a down payment on a rental property could
  prove advantageous, and heres why

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• If interested in buying a rental property, you
  can avoid saving for a down payment with a second
  mortgage
• Before getting a rental property loan, youll
  need to meet the down payment requirements, which
  are pretty strict to say the least. For most
  homeowners, this can take a long time, but with a
  second mortgage, you can use the assets you
  already own, to acquire more assets. Note that
  the interest on that loan is tax-deductible, too.

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• Your second mortgage can help you avoid PMI
• More commonly known as Canadian Mortgage and
  Housing Corporation (CMCH) fees, Private Mortgage
  Insurance (PMI), is mandatory on down payments of
  less than 20 for rental properties. With a
  second mortgage however, you can avoid PMI
  altogether, which is sometimes as high as 4 of
  the propertys value.

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• With a second mortgage, you can avail lower
  interest rates
• With your primary residence serving as the
  collateral for your mortgage loan, lenders are
  safe in the knowledge that they can take
  possession of it in case of default, and as such,
  youll attract a lower interest rate with your
  second mortgage. This makes the loan more secure,
  and while the interest rate will be higher than
  that of your first mortgage, it will still be
  lower than the interest on a conventional rental
  property loan.

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• What are the types of home equity loans available
  to property investors?
• There are two types of loans, both of which are
  detailed below
• Fixed rate home equity loans
• Repayable over a set period, fixed-rate home
  equity provides a lump-sum payment with a fixed
  interest rate, and usually runs for between 5 and
  15 years. With a monthly payment plus interest
  rate that remains the same for the entire period,
  for those investing in a rental property and
  using a buy-and-hold strategy, this type of loan
  is great.

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• Home equity line of credit (HELOC)
• Putting a certain amount of money at the disposal
  of the borrower, this home equity loan enables
  them to borrow from it and repay it repeatedly
  throughout the duration of the loan. Monthly loan
  payments are dependent upon the amount drawn from
  the account, and the interest rate will vary
  according to market rates. For investors who flip
  houses, this is perhaps the most suitable type of
  loan.
• If youre seeking to invest in a rental property,
  then your second mortgage could help you achieve
  your goals far quicker. For more detailed
  mortgage advice and guidance, schedule a
  consultation with a trusted, local mortgage
  broker.

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• Mortgage-broker-Calgary is your best resource for
  finding a mortgage for your property. Luke Wile,
  is one of the best mortgage brokers in Calgary
  and is proud to serve clients from across Canada,
  while being centered in Calgary, Alberta. Luke is
  proud to serve his clients with a personalized
  approach to finding his clients the best and
  lowest Canadian interest rates and terms offered
  by the major banks and private lending
  institutions. If you are looking for a 2nd
  mortgage in Calgary, with Luke Wile you can get
  fast and personal expertise for your mortgage!