If you are a homeowner and in need of some extra cash, one possibility you could consider is taking out a second mortgage. If the present value of your house exceeds the amount you paid for it (your mortgage total), then you have equity that can be used to borrow more money. This is basically a loan that is secured on your house and is sometimes termed a further advance.
Finding Another Lender?
You can approach your existing lender for a second mortgage, or shop around for a lower interest rate. Its likely your second mortgage will be for a lesser amount of capital, but will nevertheless be subject to higher interest rates and possible charges. This is because it represents more of a risk to the lender the lender takes a second charge over your property, which means that if the debt was recalled and your house repossessed, they would be second in line after your main lender to receive their debt.
For What Purpose?
Secured loans and second mortgages are popular with people who want to raise extra funds for example if you want to carry out home improvements or set up in business and need capital to get going. Although it can be a good...
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