December 04, 2001
By: Bev Dodd
2nd mortgage: Great terms
Our 2nd mortgage lenders will make sure you know all the costs up front, like any prepayment penalties; Or if 2nd mortgage insurance is required. We'll discuss this more below.
Many loans these days, particularly a 2nd mortgage, have prepayment penalties. Be sure to ask your lender contact if the loan you are seeking has a prepay penalty. If so, ask how long it remains in effect. Also ask whether it can be bought out, or brought down to a shorter time period, and if so, at what cost. And be sure to ask whether the prepay penalty will be waived if the loan is prepaid as the result of a sale of the property as opposed to a refinance
When researching your 2nd mortgage beware of statements such as No cost to you. Some mortgage companies use that expression to mean no out of pocket costs at closing that is, they will add closing costs to your loan balance rather than require you to provide cash at closing. Make sure you understand all the fees you are paying, whether added to the loan or not, you are the one to make sure you are getting a fair deal.
And finally 2nd mortgage insurance find out if it is mandatory or not. The most annoying thing about these premiums is that they are not tax deductible, because they are not mortgage interest, unless of course you are doing FHA financing, in which case the aggregate premium can be added to your 2nd mortgage amount and is essentially financed on a monthly basis. So, be sure to ask the lender about whether the type of mortgage you are seeking requires mortgage insurance.
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Bev Dodd is a successful author and publisher of http://www.family-refinance-consolidation-loans.com.
Many have commented that her website offers the best recommendations, links and information on loans, mortgages and financing.