A second mortgage shouldn't be confused with a remortgage as they are two entirely different mortgages, the remortgage is changing your existing mortgage for say a cheaper one and the second mortgage is when you take out another mortgage and have just what the name suggests - two mortgages on one property.
One of the most popular reasons why people take out a second mortgage on their home is if they want a large amount of cash for a particular reason. A second mortgage will usually give you more money than had you applied for a personal loan and of course you can choose to repay the second mortgage over a longer period of time.
A second mortgage - also sometimes called a further advance - will work in very similar terms to the first mortgage you took out on your home with one of the biggest factors in getting the mortgage being the amount of equity that is in your home or what it is worth. There are many other concerns that the lender will have such as your credit rating - iif your credit rating is not at its best then you could be turned down by some lenders so it is worthwhile shopping around for a second mortgage.
One of the best ways of getting the best deal with the lowest rate of interest is to go with a specialist website in second mortgages. The specialist will be able to shop around on your behalf and get you several of the cheapest quotes for your mortgage which you can then compare and choose the best for your circumstances. It is imperative that you always make sure that you have read the small print and terms and conditions of the second mortgage, there can be many hidden costs in the contract and this is where you will find them.
Sean Horton is a Director of Enhanced Wealth, a whole of market mortgage broker and IFA specialising in the provision of mortgage advice, income protection, mortgage protection and second mortgage.
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