The escalating housing market in Canada has been a topic of discussion and close inspection over the past few years,  leaving residents to consider an impending crash that will force prices to come down.  In Mississauga, the average cost of a home in October of 2014 was $587,505.  However, despite this influx, Canadians remain optimistic by preparing for a future of what they see as "positive debt” – 80%,  believing that real estate investments will help solidify their long term goals and lifestyles.  2nd mortgages in Mississauga offer residents confidence in their financial position by unlocking potential home equity and consolidating debt, so that they can look to a more streamlined and sustainable future.

 

 

Mortgages are loans used to finance the purchase of a home and can be obtained through either a bank, broker or private lender. Mortgage brokers are professional freelancers that get paid a commission to act on the part of the buyer, often having contacts with many loan lenders.  This can provide huge benefits in the form of competitive rates and negotiation on the client's behalf.  A bank will provide a loan officer who works under the umbrella of that institution, including their rates and commissions.  Loan officers will often offer perks within the bank to potential clients, although many rates need to be negotiated.

 

A mortgage is normally obtained for 90% of the home's worth, which must then be paid back to the broker or lender with interest over a pre-determined amount of time.  When the homeowner fails to repay the loan, they enter foreclosure. 2nd mortgages are becoming increasingly popular, in addition to primary mortgages, as a second loan taken out based on the home equity built up. Home equity is essentially the value of a home, minus the remaining principle loan balance – or, more simply – the amount of a home actually owned by the buyer.

 

 

Taking out a 2nd mortgage can offer a number of advantages in order to access lower-cost funding for various financial ventures.  Rising housing costs in Mississauga are forcing residents to consider renovation over a move. Utilizing existing home equity can unlock a variety of fast and economical solutions.  2nd mortgage payments have proven to be an affordable and low-interest way to fund this, helping buyers cover costs associated with purchasing a new home. This quickly provides a homeowner the capital needed for costly renovations and improvements for up to 90% of the home's value.   Because these payments are secured by the house, they come with an assured safety, which means that borrowers often maintain a lower credit rating than if they were to cover costs using a credit card or another loan.

 

Other uses for a 2nd mortgage include:

• Debt consolidation.
• Paying for education and college tuition.
• Investing in other properties.
• New businesses.
• Emergency funding.

Other funding options also include refinancing a home or obtaining a home equity line of credit. 

 

Whether it's a means to renovate a kitchen, send a child to college or unlock home equity for profitable investments, 2nd mortgages can be a useful tool in making the funds needed available to you.  By understanding the options available, homeowners can use 2nd mortgages in Mississauga to plan for a bright future; whatever the endeavor may be.