Second Mortgages
There are generally two types of 2nd mortgages. A HELOC is a home equity line of credit. This type of loan functions kind of like a big credit card that is tied to your home. The bank gives you a certain credit limit based on your home?s value. You may start off with a balance that is below your limit and take additional draws until you are at your limit and then pay down. This is typically an adjustable rate that fluctuates monthly with the prime rate. There is also a fixed rate second mortgage that has a fixed term and rate. You make the same payment every month for a finite amount of time.
Today, second mortgages are more difficult to obtain. They have all but stopped being offered by the big banks. There are only a small number of mortgage companies who still offer these products and the criteria for getting approved is getting tougher and tougher.
Basically, 2nd mortgages are now available only to borrowers with 700+ FICO scores who can prove their income. And the total loan to value ratio has been cut down to about 80-85% of the homes value. This means if you already have a mortgage that is 70% of the value of your home, it is possible to obtain an additional 10%-15% if you have adequate scores and can prove your income.
Despite current conditions, it may still be possible to obtain a second mortgage up to 90% with a lower FICO score if you have a co-borrower with a higher score.
To discuss your options for a 2nd mortgage call Envision Lending Group or Apply Now!
