Equity Calculation:

Equity = Current Market Value of Property – Remaining Balance on First Mortgage.

For example, if your home is valued at $500,000 and the remaining balance on your first mortgage is $300,000, your equity is $200,000 ($500,000 – $300,000).

Second Mortgage Application:

You can apply for a second mortgage through PML. The amount you can borrow is typically determined by the equity in your home.

Loan Terms:

The terms of the second mortgage, including the interest rate, repayment period, and any associated fees, are outlined in the loan agreement. The loan agreement or the commitment letter is usually provided to the borrower after the loan is approved based on the borrower’s current equity situation.

Use of Funds:

You can use the funds from the second mortgage for various purposes, such as debt consolidation, home improvement, education, or other financial needs as you wish.

Interest Rates:

Interest rates on second mortgages may be higher than those on first mortgages but are often much lower than rates on unsecured loans such as LOC or credit cards.

Payments:

You make regular monthly interest only payments to carry the second mortgage, which gives you the maximum control of your cashflow.

Benefits:

A second mortgage can provide access to a significant amount of funds, and the interest may be tax-deductible in some cases (consult a tax advisor for details).