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What to Look for in a Second Mortgage Lender


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TERMINOLOGY

If you are trying to locate a second mortgage lender, there are many different options in the marketplace. Purchasing a second property can provide you with a number of benefits, but you need to make sure that the lending aspect of the transaction is in order first. Here are a few things that you should look for in a second mortgage lender.

Low Interest Rates

One of the most important things to look for in a second mortgage lender is low interest rates. The interest rate on your second mortgage will determine the amount of money that you pay over the life of the loan as well as how much your monthly payment will be. This means that you should take great measures to ensure that you get the lowest interest rate available. The market will play a big role in determining what your interest rate is, but individual lenders will also influence the interest rate. Therefore, you need to shop around from one lender to the next until you find the lowest rate in the market.

Closing Costs

Besides the interest rate, other big costs associated with a second mortgage are the closing costs. The closing costs on this type of loan could run you several thousand dollars. This means that you need to do the best you can to shop around until you find closing costs that you think are reasonable. Many people do not realize that closing costs are negotiable to some extent. When you start working with a lender, they are required to give you a good-faith estimate within three days. You can then take this good-faith estimate and use it to your advantage by negotiating with other lenders. If you can find a lender that combines the lowest interest rate with the lowest closing costs, you will potentially have a good lender to work with.

Lenient Criteria

Lenders all have their own criteria when it comes to making lending decisions. They are going to look at your debt-to-income ratio, the amount of income that you have and the amount of cash reserves that you have access to. All of these things are critical in getting approved for a second mortgage. Each lender is going to have unique criteria in each one of these areas. One lender might tell you that you do not have enough cash reserves or a high enough income to be qualified. At the same time, another lender may not see a problem with lending you the money that you need. You want to find a lender that is willing to work with you on these types of things so that you can qualify for the loan.

Customer Service

Something else that you should look for in a second mortgage lender is a high level of customer service. You want to work with a company that is good at dealing with customers. You want to know that they will be willing to take care of you if any problems arise in the future.