What is a Second Mortgage?

Whether you’re preparing for a large home improvement project or trying to consolidate debt, taking out a second mortgage can help you when it comes to major costs. Second mortgages allow you to use your home’s equity to take out a second loan while using your house as collateral. Second mortgages additionally permit you to borrow substantial amounts of money that you get to use however you need.   

Types of second mortgages include Home Equity Loans (HELs) and Home Equity Lines of Credit (HELOCs). While they usually come with higher interest rates, second mortgages are typically cheaper than other loans because they are secured by real estate, and the interest rates are significantly cheaper than the interest rates for credit cards. On top of being cheaper, the payment amount and the term of the loan are established from the beginning, so you know exactly what you’re paying and for how long.

“Home Equity Loans and Home Equity Lines of Credit are great products that we offer that clients can use for a variety of reasons, and they’re usually preferred over using a credit card,” says Steve Brumleve, a Universal Banker at Town and Country Bank. “The main reason borrowing against the equity in your home is a good idea overusing a credit card is that the interest rates are much more advantageous.  Our Home Equity Loans at the moment are between 5.49% and 7.89%, depending on the specific product.  Interest rates on credit cards are much higher.”

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Town and Country Bank and Peoples Prosperity Bank are proud to serve local communities in Central Illinois and Metro East. Apply today by contacting us or visiting one of our local branches for more information. Our friendly and attentive staff welcomes you to any of our locations in Springfield, Jacksonville, Lincoln, Decatur, Bloomington, Edwardsville, Fairview Heights, and Quincy.