Mortgage Lender
Getting a mortgage on your home is a huge step. It's probably about the largest financial step you'll take in your lifetime. It's a debt you'll have for a long time with possible large payments. In fact with the high cost of real estate, most mortgages result in large payments. Surprisingly enough, there are many people today that wind up taking out a second mortgage on their home, which puts them in need of a second mortgage lender. A second mortgage lender should be the same person you used for your first mortgage unless you aren't comfortable with that same lender. The reason for this is that your first mortgage lender has all the paperwork still in your file on your mortgage loan, thus preventing a lot of same things having to be done again.
There are different reasons why people will require a second mortgage lender. Of course, it's because they are getting a second mortgage on their home, but the reasons may vary. When you take out a mortgage on your home, most banks will only borrow up to 80% of the value of your home. So on a home valued at $100,000, they will borrow you up to $80,000 to buy this home. A few years later, the balance of your loan has decreased because of your many payments, whereas the value of your home has increased. You find yourself in need of some extra cash for a large vacation or to put your child through college. A second mortgage lender can help you take a second mortgage out on your home to give you that cash you need. If your first mortgage balance is down to $60,000 and the value of your home has increased to $120,000, you will have some equity in your home to borrow from.
With your home valued at $120,000, the second mortgage lender will borrow up to approximately 80% of that value, which is $96,000. However, since you still owe $60,000 on your first mortgage, you'll only be eligible to borrow $36,000 on your second mortgage, which is still a lot of extra cash to help out! The only disadvantage to this is that you now have two mortgage payments to make each month rather than one. An advantage of a second mortgage is that a second mortgage is not going to be as large as the first. Some people prefer to just refinance their first mortgage to get the extra cash. There is a disadvantage to this, however. If you've used money for a vacation or small home purchase, you may not want to be paying on this for 25 years or however long your mortgage is for. With a second mortgage, you can have the second loan paid off sooner. When you speak to a second mortgage lender, they will advise you of the best way to proceed to help you the most.
If you know anything about mortgages, you're aware that there are many different kinds of mortgages. Most of them are somewhat similar to each other with the differences being in the terms of the loan. For instance, some are no closing cost mortgages, low interest mortgages, adjustable rate mortgages, fixed mortgages, secondary mortgages, etc. The one mortgage that not a lot of people are familiar with is reverse mortgages. The main purpose of a reverse mortgage is to help the seniors and retirees live in financial security not having to worry about losing their home. A Reverse mortgage lender can give you all the information you need about reverse mortgages. Many people hear a few details on the news or television regarding reverse mortgages and believe they sound like something worth checking into. However, after checking with a reverse mortgage lender, they discover that reverse mortgages are not for everyone; they're only for seniors.
Although all banks and lending institutions have a mortgage lender or loan officer, not all banks have reverse mortgage lender on staff or even do reverse mortgage loans. There are advantages and disadvantages of a reverse mortgage and a reverse mortgage lender can answer any questions you may have if you are considering a reverse mortgage for yourself or a family member. There are a lot of misconceptions about what reverse mortgages are and what their purpose is.
Reverse mortgages are restricted to those 62 years or older. They are not a traditional home loan, nor is it a way for the bank to get their hands on your home, as many mistakenly believes. It is not free money for the senior or a cure-all for other financial problems. Although a reverse mortgage lender may ask questions regarding your financial situation, reverse mortgages are not based on your credit scores or your income. A qualified reverse mortgage lender can explain all the details, but the easiest description is that it is a way for homeowners 62 years or older to get cash from the equity they have in their home. They continue to live in their home as they always did and can use the cash anyway they choose.
Once you meet with a reverse mortgage lender, they'll set up an inspection or appraisal on your home. This is a standard process for any type of mortgage. After this is completed, the loan is approved and there will be a closing. The homeowner gets the amount of cash they requested and can spend it as they choose or choose to save it. The loan is not due until the death of the homeowner or if they permanently move. There are no payments to make during the life of the homeowner. There will be certain fees to pay as part of the closing of the loan such as interest, loan closing fees, etc. The only requirements of the homeowner are that they keep up the maintenance on the home, pay the property taxes and homeowners insurance.
There are many reverse mortgage lenders online if you're considering a reverse mortgage. Before you make any final decisions, speak with a reverse mortgage lender so you know this is the right decision for you.
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