Mortgage Intelligence

Oshawa's Mortgage News Desk!

Is A Second Mortgage Right for you?

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We all incurr unexpected expenses – a much needed home renovation or a roof repair that cannot be delayed. These expenses in some cases, are large amounts which most of us may not have saved up and as a result require financing. At this point it is advisable to explore all possible options available for obtaining financing – borrowing from a bank at a low interest rate, a loan from a family member or a second mortgage.

Image by courtsey of

Image by courtsey of

Sometimes obtaining financing from a bank might be challenging, due to bad credit, not having enough equity on your home or simply because it does not make sense to pay hefty penalties for breaking a mortgage prior to the renewal date.

If you do look at a second mortgage, the question you need to ask yourself is, “is a second mortgage the most suitable option for you?” It is advisable to seek advice from your mortgage broker, before you decide to proceed.

Your mortgage broker should explain the ‘pros’ and ‘cons’ of second mortgages:

  1. You will be charged a higher interest rate, as there is potentially a higher risk than a first mortgage. The interest rate will be determined based on your financial circumstances – credit score, monthly income and equity in your home.
  2. A second mortgage could be obtained through a secured line of credit.
  3. Second mortgages are usually administered through smaller lending institutions and private lenders, and will require a mortgage broker to facilitate the process.
  4. Broker fees will vary depending on your circumstances and it is advisable to find out fee you will be charged upfront.
  5. An appraisal of the property is usually required by most lenders.
  6. You willl be required to engage the services of a lawyer that will safeguard your interests.
  7. There will be penalty charges for early or late mortgage repayments. The best time for repayment avoiding penalities would be on the renewal date.

It is important to understand the process and the costs involved, in order to make an informed decision.

An informative article published by Huffington Post, gives readers insight on what potential borrowers need to know and understand about second mortgages.

If you are in need of finacing for much needed home renovations or to finance your child’s college or university education, it might be beneficial to speak to an expert at, to find out if a second mortgage is the way forward for you? Contact us to speak to an expert now!


David Hetti is a full time Mortgage Broker with Mortgage Intelligence (FSCO Lic MO8002434) David is the Director of Operations at Mortgage Intelligence Oshawa and heads a team of full time licensed Mortgage Agents serving all of Ontario. David is also a licensed Insurance Consultant.

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