Most Canadians face extreme amounts of credit card debt, as well as student loans, mortgage debt, automobile loans, and other personal loans. If you are looking for a convenient methods of debt consolidation you can do so by obtaining a second mortgage.
What Is A Second Mortgage?
A second mortgage is an Ajax mortgage that is taken out in addition to your primary mortgage. With this loan, your mortgage is borrowed against the equity in your home and your home is put up as collateral.
Your home’s equity is the difference between how much you owe on your loan and your home’s overall value. Your equity builds in one of two ways: every time you make a payment towards your loan, and by home appreciation. Generally, most homes appreciate over time depending on where you live and the type of home you have. Therefore, the more you pay towards your mortgage and the longer you have been living in your home, the more equity you could have.
Second Mortgage Requirements
To qualify for a second mortgage you should have at least 20% of the equity in your home. You will also need to have good credit and a stable income. Before you begin your second mortgage application, make sure you have been with your current employer for at least two years. Being employed for this amount of time tells your Ajax mortgage broker that you are financially capable of having a mortgage because you have a stable income.
How To Consolidate Debt With A Second Mortgage
You can use a second mortgage to consolidate debt into one loan. With interest rates outrageously high on credit cards and student loans, consolidating this debt into a second Ajax mortgage could help you save money.
If you owe money on multiple different credit cards you have to worry about making payments at different times every month. By consolidating your debt into one mortgage, you only have to worry about making a payment for your primary home loan and your second mortgage. This will help you stay more organised and prevent you from missing a payment and defaulting on your mortgage.
For more information on how to consolidate debt with your mortgage, please contact Sean Stewart, your local Ajax mortgage broker, at 905-427-9596.