Question:

How to choose among 2nd mortgage lenders?

Answer:

When you are looking for a home improvement loan, or any quick cash and you don't want to get a HELOC, you may consider going to the 2nd mortgage lenders. They will fetch you a loan that suits your needs.

First thing to know when approaching 2nd mortgage lenders is the equity you have in your home. That is, if your house is worth $150,000 and you have a remaining balance of $90,000 to pay, equity is $60,000. Sometimes you may get a 2nd mortgage loan of 100% of the equity you have in your home, in some states a 2nd mortgage will be allowed up to 80% of the existing equity, and sometimes a 2nd lender will do over-equity second mortgage. Although it is not recommended to go over-equity, if you are good at investing, you might be able to make good use of any extra cash.

When comparing second mortgage quotes, watch for insurance payment, rates and prepayment penalties, and the terms of the fixed-rate or adjustable-rate 2nd mortgages.

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