Mortgage Blog
Everything about 3rd Mortgage
July 11, 2024 | Posted by: Sarabjit Dhuna
3rd Mortgage is the type of loan that is against your property. 3rd Mortgage provide Homeowners tool that can tap into their equity of their home. 3rd mortgage can help homeowners with various types of needs like House renovation, debt consolidation, investment opportunity etc.
Understanding about 3rd Mortgage
3rd Mortgage involves borrowing against your equity of your home. 3rd mortgage comes after primary which is 1st and 2nd mortgage. Usually, 3rd mortgage’s interest rate is higher than 1st and 2nd mortgage. The rate is higher for lender even traditional bank and credit union don't offer 3rd mortgage because of high risk. You can use think 3rd mortgage for debt consolidation, major renovation at your home, investment opportunity.
Advantages of 3rd Mortgage: -
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Without Selling their property, Homeowner can access large amount of funds from their equity of the home.
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You can use 3rd mortgage for debt consolidation like consolidate all your payments into 1 payment with the debt consolidation.
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You can tap into 3rd mortgage for the opportunity like major home improvement or you want to expand your business etc.
Disadvantages of 3rd Mortgage: -
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Interest rate is higher in 3rd mortgage compared to 1st and 2nd mortgages due to risk taken by lender. In case of default, lender will be 3rd to recover investment.
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Limited lenders options
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They will charge higher fees because of risks they will take.
Eligibility of 3rd Mortgage: -
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Credit score
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Home equity
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Property location and value of the property
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Income
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