How do I qualify for a second mortgage?

Requirements can vary between lenders and loan types, but they generally include:nnProof of employment and income.nAt least 20% equity in your home.nCredit score of 620 or better.nDebt-to-income ratio (DTI) below 43%.nThese factors will also determine your interest rate and total loan approval. The better your credit score or the more home equity you have, the less risk you pose to lenders, and the better your offers will be.

How large is a second mortgage?

The size of a second mortgage depends on the amount of equity you have built up. Lenders typically allow you to borrow up to 90% of the value of your equity.

What’s the difference between a home equity loan and a HELOC?

Home equity loans provide a lump sum payment at a fixed amount. HELOCs provide a line of credit, allowing you to choose how much you need to borrow up to the credit limit.

Should I refinance my home loan or get a second mortgage?

If you can get a better interest rate or loan terms, it may be best to refinance your home. If you want to keep the terms of your original mortgage but need cash to consolidate debt or make a large payment, a second mortgage may be right for you.

Second Mortgages: A Complete Guide