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Some second
mortgage loans may extend for as long as 15 or 20 years; others
may require repayment in one year. You will need to discuss the repayment
terms with the individual mortgage company and select one that offers
terms that best suit your needs. For example, if you need to borrow
$20,000 to make repairs on your home, you may not want a loan that
requires you to repay the entire amount in one or two years because
the monthly payments may be too high.
Be sure you understand how much your monthly payments will be and
what they cover. With some loans, you will be required to make monthly
payments on the principal and interest. With other loans, you may
be required to pay interest only on the borrowed amount. With these
loans, your monthly payments will not reduce the principal amount
of the loan. With such a loan, you will be required to pay back the
entire borrowed amount at the end of the loan period. These loans
are popularly known as "balloon loans." If your loan has a balloon
payment, you should consider how you will arrange to repay the entire
amount when it becomes due. On "home equity lines," the mortgage company
does not have to give you the exact amount of the monthly payment,
but must explain how it is figured. This is because the borrowed amount
will vary and your outstanding balance will change if you use the
line of credit. However, if your monthly payment term is 5% of the
outstanding balance and your outstanding balance is $5,000, your minimum
monthly payments would be $250.
To find out how much you'll be able to borrow at current interest
rates, you can fill out an online
application and a customer service representative will contact
you within 48 hours (due to the volume of inquiries).
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Mortgage | Second Mortgage
| Refinancing |
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Loan | Debt Consolidation
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