Although taking out a mortgage is considered a cumbersome process with a large commitment, quite a few people take out a second mortgage, and it is usually also very lucrative for them. That’s what you need to know about her
By: Zeev Nachmanzon
Life does not give us many shortcuts, we have to learn, work, invest and not stop in order to be able to reach the goals we have set for ourselves (or set for ourselves). At some point in life comes a moment when we feel like settling in – the stage where we want to buy a house, or build it. Even in this case, there are almost no shortcuts, and if we do not have the amount needed to purchase an apartment, we must bring the money from another source. Or in other words we must take out a mortgage.
Most people think they know What is a mortgage, And then comes the moment when they need to take it: this is the stage where the big numbers, the small print, the clauses, the unexpected expenses and our commitment that must know how to plan in advance come in. In the end, most of us were very surprised by the gap between what we thought we would pay and what we actually paid. In many cases it works out, but there are also cases where not every year hundreds of households do not meet the mortgage expenses and risk losing the property they purchased, whether it is due to improper financial management or as a result of unplanned situation – decrease in income or increase – the situation created difficult , Unpleasant and can also degrade the quality of life.
Experience teaches
Get to know the second mortgage. Hopefully you will not need it, but even if you do – do not be ashamed or ignored – she is here to help you improve the situation. In fact, the role of the second mortgage is to facilitate the day-to-day running of people who have difficulty meeting the repayment of the original mortgage they took out. This is not a correction, but an updated assessment of the change in the socio-economic situation. For that matter – if one of the mortgagees is fired, which leads to a drop in income – it will be very difficult to meet the same payment terms planned earlier in the phase; If God forbid who in the family is ill, which requires high financial expenses for treatments – leads to the same result. Bottom line, crises and difficult times are not lacking in life unfortunately, so it is important to understand that precisely for such cases there is the possibility of taking a second mortgage, and although it also has a commitment – studies show that it greatly facilitates those who choose to use it and helps get out of financial distress.
Plus, not re
A second mortgage means increasing the financing from an external source, and it has some rules of thumb: First – the amount. The calculation of the amount of the second mortgage is based on 70% of the value of the mortgaged property, from which the balance of the debt of the first mortgage is deducted. The interest rates and terms of the second mortgage will usually be better than the first, because in the end the person who made the loan for you will want to get it, and not try to offset it with a property you lost. Unlike a mortgage cycle, where your bank and competing banks will push for such a process to offer you competition – you will be the one to initiate the second mortgage, and you will also be required to prove that you can get it. Stability and financial immunity are basic conditions for obtaining a second mortgage, and beyond proper payment ethics, you will be asked to present recent pay slips, a breakdown of expenses and income for the last three months at least. Also, if there are secondary sources of income like Education fund, Rent, etc. – you will be asked to present and detail them as well, and of course if there are existing or future changes in income – it is appropriate and desirable that they be clear to both parties.
To sum up, it is important to remember one detail that concerns you and your power. A second mortgage comes to help you, not to put you in front of the wall and scold you for a situation that has arisen. It is best to take it wisely, and examine it carefully. Tools like mortgage calculators or mortgage advisors can also help, but in the end, the responsibility and understanding is yours, and for you.