Second Mortgage

Taking cash out of your home with a second mortgage

A second mortgage can be a good solution if you want to take cash out of your home but don’t want to refinance your primary mortgage. A second mortgage is a long-term loan, with fixed monthly payments and a fixed interest rate, that uses the equity you have in your home as collateral. It is similar in structure to a primary mortgage.

There can be many reasons to take out a second mortgage. For example, you might use it to finance a renovations project that will increase the value of your home. You might also take out a second mortgage to replace high-interest credit card debt or to obtain the funds needed to make a downpayment on an investment property.

A second mortgage comes with a predictable, fixed monthly payment that will never change for the duration of the loan. It is a good option for many, but it is not the only option available. When you call us for a free consultation, we will show you all the numbers and provide additional advice if needed, to help you decide what will work best for you.

“Alejandro offers so much more than your average mortgage broker, and I am so grateful we found him. We are doing another transaction with him soon, and I am definitely giving his name out to my friends”

— Amy, Real Estate Investor

Second mortgage features

A second mortgage is a long-term loan that uses the equity you have in your home as collateral.

Some of the characteristics of a second mortgage are:

  • Long-term loan contract similar to a primary mortgage. All the borrowed funds are paid to the borrower at the beginning of the contract

  • Fixed interest rate, generally a little higher than that of a primary mortgage (used to purchase a home)—but lower than the interest rates of most credit cards and personal loans

  • Fixed monthly payments that do not change over time: If you pay more than the required minimum payments, you will be able to pay off your loan faster, but your monthly minimum payments will stay the same

  • Can be a good solution for someone with a fixed income looking for a long-term loan, for example to refinance high-interest debt or to obtain a downpayment on another property

Knowledge & experience

Alejandro Szita has been solving out-of-the-box real estate problems since 2006. He enjoys challenges and uses a network of 15 different speciality lenders to get his clients the loans they need.

Thanks to his knowledge and experience, he is quickly able to ascertain the benefits and disadvantages of doing a refinance in specific situations, and he will give helpful advice on how different options could play out for you in the short and long term.

Second mortgage vs. Home Equity Line of Credit (HELOC)

Another option for taking cash out of your home is getting a Home Equity Line of Credit (HELOC). A HELOC is similar to a second mortgage in that they are both loans that use the equity in your home as collateral. Key differences include:

  • A second mortgage has a fixed interest rate, whereas a HELOC has a variable interest rate

  • A second mortgage is a one-time loan that you pay off over time, while a HELOC is a revolving credit line

  • Second mortgage usually have slightly lower interest rates than HELOCs

  • When you pay down a HELOC over time, your minimum monthly payment also decreases (similar to how monthly payments on a credit card decrease with a lower balance). On the other hand, a second mortgage has a fixed monthly payment that doesn’t change until the loan is paid off. That means that if you start paying more than the minimum monthly payment on a second mortgage, you will pay your loan off faster, but your minimum monthly payment amount will stay the same.

Get a Free Brainstorming Consultation

Get a no-charge, no-obligation brainstorming consultation by Zoom or in person. Alejandro will discuss your options, brainstorm with you, provide helpful advice and answer all your questions.

Call us at 310-294-9417 for a free consultation or schedule an appointment online.