Applying for a 2nd Mortgage

A 2nd mortgage is often confused with a remortgage, when in fact the two are very different. A remortgage means you change mortgage lenders; a 2nd mortgage means you take out another mortgage on your property. Applying for a 2nd mortgage is much the same as when you applied for your original mortgage. Your chosen lender will assess your details, check your financial history and arrange for a valuation to be carried out on your property.

It is possible to apply for another mortgage even if you have mortgage arrears or County Court Judgments against you. If you have owned your home for a while there is a good chance you will have reasonable equity in it. This will also be taken in to consideration, as many lenders define the size of the loan by how much equity you have in your property.

The big benefits to obtaining another mortgage are you get a loan at a reasonable rate of interest. Mortgage rates are much cheaper to pay back than bank loans and credit card advances. One major thing to consider before taking out a 2nd mortgage on your home is, like your first mortgage, it will be another secured loan. This is okay if you are financially strong; however you face the risk of losing your home if you fall on poor financial times and cannot afford the repayments.

If you have two separate mortgage lenders and you pay one and not the other, you still risk losing your home. If you could not pay either lender,the house would be sold and the money split between lenders in order to clear your outstanding debt.

The Post Office now offer mortgages and will accept applications from people wanting a 2nd mortgage. Their interest rates are attractive and they also offer fixed-rate payments for a period of two, three or five years.

They have a variety of different packages available to suit a customer's individual needs, with many including cash back and all fees paid features. Northern Rock also accept applications for 2nd mortgages and with an interest of 4.9% APR, subject to status, they are one of the most competitive out there. It is important you consider all your 2nd mortgage options carefully before committing yourself financially.

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