Mortgage Compared To The First One?
Q: I have a question about taking second mortgage, say you bought a house at $200K (with most of the money borrowed from the Bank, of couse), does it mean that you can borrow another $200 K from the bank by taking the second mortgage? What are the criteria that lenders use to judge if you can qualify? I have a perfect credit record. How much interest rate will I be paying back the second mortgage compared to the first one?
A: More. How much more depends on your particular circumstances. Second mortgage interest rates and terms vary widely, so do your homework. Depends what the house is worth. Typically they get kind of hinky once the total amount financed on both mortgages approaches the value of the house (not that it can't be done). The rates go up dramatically with the closer you get to (or more you exceed) the value of the house.