When you require cash immediately, second mortgages often turn out to be helpful. However, it is possible only when you have equity in your house, you will be allowed to get the cash to it. People often confuse it to be a regular loan and assume that the rates would be equivalent of the regular loans. However, you need to clarify the rates with 2nd mortgage lenders. It would be usually higher than the regular ones. In addition, it is not necessary that you have a home; you will be able to qualify for the loan. It depends on the kind of loan type and the lender you choose.
Image by Shutter stock
Here is how to go about the process to make sure that you get the right finance from the 2nd mortgage lenders:
Ready the Documents
When you think of approaching any of the 2nd mortgage lenders, you need to be ready with the documents. Ideally, you will need all your bank accounts compiled. The lenders will look at your financial records. In addition, if you have any investments or accounts for the same, you will need to provide it to the lenders. There are W-2 forms and IT returns that you need to offer to the lenders. Since you will be applying for the second mortgage, there will be first mortgage that you must have applied for. It is your job to update the lenders about the same.
Knowing the Variety
Once you have compiled all your documents, you should update yourself with the types of mortgages that are available. Within the second mortgage loans, there are home equity loans, lines of credit, and reverse mortgage. Unless you know the kind of loans and their conditions, you will not be able to apply for them properly. Chances are that the applications may get rejected and you will be denied for the loan approval. It is because you chose the wrong category for the loan. Hence, you should have a word with the 2nd mortgage lenders to get the right details and apply for the loan accordingly.
Image by Shutter stock
Contacting the Lender
It is important for you to understand that 2nd mortgage lenders play a crucial loan in the entire process. Right from guiding you with the type of loans to helping you get them approved, it is their job. So, you need to take your time in finding the lenders and contacting them. With the online opportunities, it has become a lot easier to find the lenders. In fact, their site will offer you online quotes to let you know the tentative rates of interest. This will help you know whether you should meet the lender in person or look out for the one that fits your bill. However, one face-to-face interview will always give you clarity about the loan procedure.
Present during Underwriting Process
Certainly, you cannot miss the underwriting process. There will be enormous work during this process but the 2nd mortgage lenders will help you through it. The executive might call you up for verifying the documents or the information that you provided during the application. Be attentive and make sure you do not miss the call. In case, the lender requests you to come down to the office, visit it. If you try to postpone it, you will be delaying the process of loan application and approval. In turn, you will not get the money on time. In addition, chances are that the loan might get rejected. So, in order to avoid such delays or rejection, it is better to attend the meeting.
If you are diligent and prompt, you will be able to sail through the loan application smoothly.