Consider the options for a second mortgage in Arizona
If you’re looking for an Arizona second mortgage to reduce your monthly expenses, make sure you understand exactly how much the monthly payment will be on the loan. Any reputable Arizona mortgage lender should tell you all the details up front. With some second mortgage loans, you have to make monthly payments on the principal and interest. With other Arizona second mortgage loans, you may have to pay interest only on the borrowed amount. This is usually in the case of a balloon payment loan, where you pay interest only on the second mortgage loan and are then expected to pay back the entire loan amount at a later date.
In the case of an Arizona home loans that use the home’s equity to draw money, also known as a home equity line of credit, the mortgage lender doesn’t have to give you the exact amount of the monthly payment. They must only explain how it was calculated. The borrowed amount will vary on equity-based Arizona home loans, and your outstanding balance will change if you use the line of credit. You should at least have a maximum monthly payment amount to work from, though.
An Arizona mortgage lender may charge you a fee for lending you money. The fee is usually a percentage of the total Arizona home loan amount. These fees are sometimes called points. One point is equal to one percent of the amount of the home loan. If you borrow $10,000 with a fee of eight points, for example, you would pay $800 in points. The number of points charged on Arizona second mortgages and home equity loans varies.
Some Arizona second mortgage loans can extend for as long as 15 or 20 years. Other second mortgage repayment terms may be much shorter. You should discuss the repayment terms with your Arizona mortgage lender and choose a loan that offers terms that are good for you. It’s also a good idea to shop many different Arizona mortgage lenders online before settling with one, so you know what the going rates are.
Don’t choose an Arizona second mortgage with monthly payment amounts that are too high for your budget, because you could end up losing your home in the worst case scenario. A second mortgage should help lift burdens, not create new ones.