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80 Percent Mortgage

As the residential financing and homeownership market swells with mortgage holders, a second mortgage or an 80 percent mortgage has become an advantageous tool for helping persons mitigate through times of financial need.

Devised of two components: the interest rate and the principal, mortgages may only be seen as a financial obligation. Yet, over time, mortgages can also be seen as a source of accessible capital and credit.

This is attributed to the fact that during the early stages of repayment of a loan, the borrower is essentially repaying the interest. However, as the mortgage is paid off, the equity of the property begins to appreciably expand.

With the vast number of lending products and mortgage companies that abound on today’s market, there is no shortage of supply. And where 80 percent second mortgages are concerned, the supply is equally as great. Not only do the top ranking lending companies have a wealth of 80 percent mortgage products, but they are also stocking up on additional, newer varieties.

Called second mortgages, eighty percent second mortgages or home equity loans qualify under this heading for they actually become the secondary holder of the home property. In other words, if the borrower defaults on the loan, the second mortgage company cannot collect on the lien until the first lending institution has been satisfied.

The benefit of a second mortgage or 80 percent mortgage is that the interest rate is normally very affordable. The second mortgage is generally financed based on the property value of the home, as well as, how much the original mortgage holder has paid in the way of equity (repayment of the principal aspect of the mortgage.

While the homeowner’s purpose in securing an 80 percent second mortgage can run the gamut from desiring to pay back logged bills, he | she may also want it to make home repairs and | or improvements. Often homeowners would like to make property enhancements without using their savings, trust funds or retirement money so they opt to take out a home improvement loan or an 80 percent second mortgage.

Today's lenders continue to provide excellent loan terms at reasonable interest rates. In fact, there hasn't been a better time in several years to consider taking advantage of current home improvement loans available on the market. As an equity loan is typically eighty percent of the property's value, most homeowners do not need even need the entire amount in order to cover the cost of their proposed housing upgrades.