Second Arizona mortgages are secured by the same property as a first lien Arizona mortgage. The first lien has priority. The first lien gets paid first if you default. The second lien gets paid whatever amount is left over. If there are no funds left after paying the first off, then the second won’t get paid anything. Second mortgages are normally determined by the equity in your home.
Equity is the difference between the appraised value of your Arizona home and the amount of equity you have in the property. Interest on second mortgages is also deductible. Most people take out second mortgages for home repairs and improvements, debt consolidation, to pay college expenses, for retirement, a vacation, to pay medical bills or for other family expenses.
Second mortgages include:
Home Equity. A lump sum loan at a fixed rate.
Home equity line of credit (HELOC). Allows you to access cash when you need it at a variable interest rate.
Traditional second mortgage
Your lender will order an Arizona appraisal. Your credit must be good, and you need equity in your home. There are closing costs associated with the loan. The lender is required to give you an estimate of the costs at the time you apply. Before you make a decision about taking out a second mortgage, make sure you can afford to pay it back. If you default, the lender could foreclose. If you take too much equity out, you could end up upside down on our mortgage if property values decline like what has been happening the past few years in the Arizona housing market as well as nationwide.
It is a good idea to work with an Arizona mortgage broker who can help you find the right second mortgage product with favorable loan terms and the best interest rate. The mortgage broker works with many lenders so they can offer you a variety of loan products to compare Arizona mortgage rates and find one that meets your needs. The broker will help you complete the application, review your credit and help y gather your financial information for submittal to the lender. The broker understands what type of information the lender is looking for and will make sure you are qualified before sending our application to the lender. The lender knows that anyone that the mortgage broker sends to them meets their underwriting guidelines so they are more apt to take loan application requests from borrowers working with mortgage brokers more seriously.
Second mortgages come in handy when you need extra cash, but you should have a plan to pay the money back so you don’t put yourself in debt and jeopardize losing your home.
If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to firstname.lastname@example.org or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.
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Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.
Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.BACK TO LIST