Second Mortgage
What is a Second Mortgage
A second mortgage, commonly referred to as a home equity loan, allows you to use the “equity” in your home to secure a loan. Equity refers to the difference between what your home is worth and what you still owe on your first mortgage. Freedom Credit Union offers two varieties of Home Equity Loans: Variable Rate Lines of Credit and Fixed-Rate, Closed-End loans.
Home Equity Line of Credit (HELOC)
For maximum flexibility and the lowest payment, a credit line tied to the equity in your home is a great option. You can borrow money as you need it, and monthly payments are based on 15 year repayment terms. As you pay the balance down, that equity is available for you to borrow again quickly and easily.
Fixed Rate Second Mortgage
If you don’t need the flexibility of a line of credit or prefer a fixed rate on your home equity loan, a fixed rate loan a great option to consider. We offer terms up to fifteen years at low, fixed rates. With low closing costs and fast turnaround time, we make the process easy!
What are the benefits of a Second Mortgage?
A home equity loan offers many potential benefits, including:
- Tax deductibility – The interest paid on a home equity loan may be tax deductible. Be sure to check with your tax advisor regarding the deductibility of interest.
- One low payment – If you currently have many monthly bills, consider consolidating them into a single loan with one easy payment.
- Lower interest rate – A home equity loan offers very attractive rates. Savings are often dramatic when consolidating higher-interest credit cards.
- Get out of debt faster – If your goal is to get completely out of debt, restructuring your debt with a home equity loan may help. With discipline and patience, you may be surprised at how quickly you can eliminate your debts.
If you would like to explore your options and see which home equity loan is right for you, speak with any of our member advisors; we love to help!
2nd Mortgage Loans Rates
Rates shown are for 80% loan-to-value; lower rates may be available for lower LTV.
Estimated fees to establish a variable rate Home Equity Line of Credit range from $250 to $650. Variable rate as low as Prime + 0%. Maximum APR 12%. The annual percentage rate may vary after the account is opened. Contact the credit union for additional rates and terms.
NMLS #640476
Second Mortgage FAQs
Q: What is a second mortgage?
A: A second mortgage is a loan that is taken out in addition to your primary mortgage on the same property. If your primary mortgage has a low rate you’d like to keep, but you want to use your equity to get cash, a second mortgage might be a good option for you.
Q: How can a second mortgage benefit you?
A:Many people utilize a second mortgage to cover major expenses. These could include home renovations, debt management, investment opportunities, medical expenses, yard updates or educational costs.
Second mortgages can be a lower-cost alternative to high-interest personal loans or credit cards.
Q: What are the requirements for a second mortgage?
A: To qualify for a second mortgage, it is important to have strong credit, a low debit-to-income ratio and sufficient equity in your home. Calculate your equity to see where you sit today.
Q: How do I apply for a second mortgage?
A: Start the process of obtaining a second mortgage by determining how much you can borrow and preparing the necessary documents. Meet with a loan officer to begin your application and receive step-by-step guidance.