Second mortgages give Cambridge homeowners the financial freedom to comfortably handle nearly any situation. The mortgage on your home can be your most powerful financial asset. When taking out a second mortgage or home equity line of credit, it is important to know what you’re getting yourself into so that you can properly allocate the money where you need to. A mortgage advisor can help sort through some questions that you may have about whether refinancing your home is right given your current situation. Here are some questions that you should answer before choosing to refinance your home.
How much is the interest rate expected to fluctuate over the terms of your second mortgage?
Will you be able to afford the interest payments when fluctuations occur?
How high of an increase in the interest rate will you be able to tolerate without risking foreclosure?
Will the things you plan to spend your money on be worth it, even at higher interest rates?
Second mortgages are a great way for Cambridge homeowners to get quick
access to cash, consolidate debt, or finance any number of large-scale
expenses. Homeowners have taken advantage of second mortgages and home equity
lines of credit to help them consolidate their debt and get out of debt
quickly. Given that their interest rates are generally much lower than that of
your average credit card, it makes sense for homeowners to save money while
putting all of their expenses under one simple monthly payment. This will save
you money over the long term and give you better cash flow in the short term as
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Homeowners should understand that no matter what the additional funds
are being used for, it is an absolute necessity to ensure that you can make
your payments under any circumstances. Since you are borrowing against the
value of your home, your home is being used as collateral. Failure to make your
payments could result in the foreclosure of your home. For this reason, it is
important to carefully consider whether refinancing your home is right for you.