If you’re thinking of getting a second mortgage in Calgary, you will want to get one that saves you money. There are several main reasons why you might need or want a second mortgage. The most popular reasons include making major home renovations such as adding on extra space or upgrading the kitchen. Other reasons could include getting money to finance your children’s college or university costs. You might be dreaming of getting that dream cottage where you can get away, or even to buy a second home to get rental income and make a profit when sell it later down the road.
Getting a Second Mortgage in Calgary
So, how do you go about and get a second mortgage anyway? Simply put, the process is pretty much exactly like you went through to get your existing mortgage. You have to follow all the same steps to get your paperwork together.
Your first primary step is to ensure your credit rating is up to snuff, so make sure you get a credit rating done on yourself. If you find an error has been made, and you can believe that happens all the time, then you need to get that straightened out before hand.
The next step is to take a good hard look at both your current and future financial circumstances. The key point to remember that a second mortgage is viewed the same as a first mortgage. You are using the equity you have built up in your home to borrow against. This means that your home will be the collateral the bank will be using when they lend you a second mortgage. And, just like a first mortgage, if you default on the second mortgage, then you could end up in a foreclosure situation and lose your home.
Make absolutely sure you budget yourself suitably to be able to pay for both mortgages. If you are a two income household, you have to make darned sure you can manage the payments if one of you should be unfortunately down-sized or laid off form their job.
Where to get a Second Mortgage
The normal practice used by people who get a second mortgage is to use the same lending institution who gave you your first mortgage. Basically, as stated previously, you will have to update all the paperwork you used for your first mortgage. This includes your entire current debt load, income tax forms, paystubs or other manner to show all sources of income.
It might be a good idea to even perform a little research over the internet to get an idea of you might fare as far as what it might have to budget yourself monthly for different mortgage scenarios.
You also might discover that you can actually get better rates with a different lender. Using a different lender, especially if your toying with the idea of refinancing your first mortgage might be a bit tricky if you’re not too up on the lending process. You might find it more advantageous and convenient to use the services of a mortgage broker to help steer you through the application process and to help you find the best second mortgage rates. They can give you a lot of good advice and may even help you save even more money on both your mortgages.
Photo by RMIT University
