If you are in the market for a second mortgage and are not happy with your current mortgage lender or mortgage broker, you may be wondering whether you can switch and use a different mortgage broker or mortgage lender than you did for your first mortgage.
Well the answer is yes, and this is because your second mortgage is tied to your home equity and not directly to your first mortgage. This makes it easy for you to change mortgage lenders or mortgage brokers when looking for a second mortgage.
To understand why this is the case, it is helpful to understand what a second mortgage is and how it works.
What is a second mortgage?
A second mortgage in Brampton is a loan that is secured using the equity in your home. Most lenders will allow you to borrow as much as 85% of the value of your home equity. Therefore, if you have a home value of $600,000 and you have $200,000 left to pay on your mortgage, you should be able to borrow up to $310,000 with a second mortgage. (There are even some lenders that will allow you to borrow up to 90% of your homes equity, but these lenders base their approvals on many different factors)
How do I apply for a second mortgage?
The process for applying for a second mortgage isn’t really all that different than that of applying for a first mortgage. Your home will need to be appraised in order to determine how much home equity you have and you will have to provide a number of financial documents in the application process. Fortunately, since a second mortgage is a loan is secured against an asset that you already own (your home), you do not necessarily have to have perfect credit in order to qualify.
Is changing lenders or brokers a good idea when I get a second mortgage?
Even if you are happy with your current lender, it is always a good idea to compare rates. Even a small discount can result in big savings over the long term.
As far as mortgage brokers, you should always work with a mortgage broker who has your best interest in mind. It is more than ok to use a different broker if you are unsatisfied with their previous service and commitment to you. If you decide to stay with the same broker, they should be willing to compare lenders for you again to see if anything has changed since your first mortgage.
Contact me today!
If you are interested in learning more about second mortgages or in submitting an application, I would love to help. Contact me today for a consultation.