Are you looking for a second mortgage and not sure how to get the best deal. There are plethora of lenders out there, all offering second mortgage finance, ranging from your existing lender to other banks and loan brokers. Do you worry that you have not found the best deal and it will be cheaper elsewhere. If you follow this 5 point strategy you are on the road to getting your second mortgage at a good price.
Buying a second mortgage for homes has emerged as a feasible option for people who are unable to make the requisite down payment for the property. First of all it is important to understand how a second mortgage works. Suppose you wish to buy property and don’t have the required 20% of the sale price as the amount to make the down payment. One option for you is to opt for private mortgage insurance for the required amount. In this, you will again need to make a small down payment and then make monthly installments for the rest of the value.
Another option is to take loan in two installments. Let us, for example, assume that you are in a position to make 10% down payment. That means you will require 90% of finance. In this case, you will get 80% loan as the first mortgage and the remaining 10% will be financed as the second mortgage.
Ask your current lender
You already have a mortgage with your lender so pop down to your local branch or call the service centre and ask them what rates and terms they can offer to you as an existing customer. Chances are they will not be competitive but this should always be your first point of call.
Search on the internet.
The internet is now full of price comparison sites offering second mortgage loans, click on the sites enter your details and you will be presented with a list of lenders all offering slightly different terms and rates. This is a blunt way as you will not be sure if you qualify with out contacting the lender direct. As many of the best deals have exclusions in the small print
Contact a mortgage broker
Mortgage brokers have access to specialist sourcing systems similar to those of the comparison sites, the benefit of using a broker is they will also be able to discuss with you the advantages and disadvantages of a particular lender. A mortgage broker will also complete the application on your behalf.
Check the local paper
Most of the second mortgage providers place regional adverts in newspaper and magazines, offering their latest deals with terms and conditions. A free phone number is normally provided for you to contact them.
Compare against a remortgage
You may find it cheaper to raise extra capital with a standard remortgage, many lenders are offering fee free remortgage deals which can be a cheaper option than taking a second mortgage.
If you follow this five point strategy you should have accumulated a wealth of information on rates, lenders and criteria. After sifting through all the quotes you have received, you should be on the way to getting the most competitive second mortgage out there. Or at least feel comfortable in the fact that you did not take the very first offer.
John Preest is a mortgage advisor for J P Financial he has over ten years experience as a mortgage broker, for more information on the best second mortgage rates please visit our website. We can also provide information and advice on second charge mortgages and buy to let finance for UK residents.
For more information see Secured Loans
http://www.jp-financial.co.uk/mortgage/second-mortgage/
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