
clear debts that have high interest rates attached;
secure capital to help their family or business;
finance major renovations to their home;
make consistent monthly repayments that could be set up on the same schedule as their first mortgage;
most of private lenders offer Interest Only payment.
BUT
due to a greater risk for the lender by being in the second security positionan, equity take out loan in the form of a second from a private lender will likely be at a higher interest rate for a lower loan amount vs. a first mortgage with a traditional lender.
the borrower needs to consider additional expenses, such as closing costs and appraisal fees, which may need to be paid upfront.
exit strategy that the borrower needs to come up with as a short mortgage solution.
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