Second Mortgage faq's
What is a second mortgage?
A second mortgage is a kind of mortgage on property that has a lien already on the first mortgage. This mortgage is generally on the remaining equity in the home.
Is interest on a home equity line of credit deductible as a second mortgage?
You may deduct home equity debt interest, as an itemized deduction, if you are legally liable to pay the interest, pay the interest in the tax year, secure the debt with your home, and do not exceed certain limitations.
Contact us to help you with your Second Mortgage now!
I have a mortgage for my primary residence and a second mortgage for land that I intend to build a home on. Can the interest be deducted for the second mortgage?
Unless you have begun construction of a home on the bare land that you can occupy within 24 months, the land would be considered an investment and the interest you paid on the second mortgage would not qualify as deductible mortgage interest.
What is the difference between an Equity Line of Credit and another type of second mortgage?
An Equity Line of Credit is money in an account that can be used as you need it. Other types of second mortgages you borrow a lump sum and pay it back over a period of years with interest.
What is a Fixed Rate Second Mortgages (FRSM)?
These are installment loans that can be amortized over 5, 10, 20 or 30 years, the payment and rate are fixed for the term of the loan.
I am trying to determine whether to refinance my mortgage, or take out a second mortgage. Which one should I do?
When interest rates are falling, it makes more sense to refinance your entire mortgage in order to take advantage of a lower interest rate. This will lower your monthly payment. The situation is exactly opposite in an environment of rising interest rates.
How do I determine which type of secondary home equity financing is best for me?
A reasonable guide for making this decision is to calculate your intended use for the money. If you have a pre-determined expense that will call for a lump sum or fixed payment then you may prefer a traditional second mortgage.
Can I apply for a second mortgage secured against an investment or rental property?
Yes, it is possible to get a home equity line of credit or second mortgage on a property that is non-owner occupied. There may be a loan maximum which is lower than that of owner occupied loans.
What is a 125 home equity loan and why should I want one?
The 125 home equity loan is a second mortgage that allows you to borrow up to 125% of what your home is worth. The 125% home loan is used to consolidate high-interest debt, get cash for home improvements and reduce your total monthly payments.
If I just refinanced a few months ago, but rates have dropped, is it worth it for me to refinance again?
A good rule is if you will save more money in five years than the closing costs of the new loan it is a good time to refinance. But your loan officer will be able to help you decide if refinancing is the best decision.
Contact us to help you with your Second Mortgage now!
|
