Home Equity Credit Lines
If you need to borrow money, home equity lines may be one useful source of credit. Initially at least, they may provide you with large amounts of cash at relatively low interest rates and they may provide you with certain tax advantages unavailable with other kinds of loans.
Length of Second Mortgage
Some second mortgage loans may extend for as long as 15 or 20 years; others may require repayment in one year.
Be sure you understand how much your monthly payments will be and what they cover. Your mortgage company should be able to give you this information in advance.
Second Mortgage Costs
Many companies will charge a fee for lending you money. The fee is usually a percentage of the loan and is sometimes referred to as “points.” One point is equal to one percent of the amount you borrow.
Second Mortgage Rates
If you have a fixed-rate loan, the interest rate is set for the life of the loan. However, many companies offer variable rate mortgages, also known as adjustable rate mortgages or ARMs.