Many people debate about whether or not to take out a second mortgage on their home to pay for upgrades such as pools, landscaping, or additional space. You might wonder, “Is this a good idea?” It all depends on your credit and how much your home is worth.
If your home is worth more than what you have in it, then you are a good candidate for a second mortgage and would be considered a low-risk candidate to mortgage lenders. Before you apply for a second mortgage, however, you need to do your research. Find the lenders who will give you the best rates and will work with you to ensure that you are getting the best deal.
Ideally you don’t want to put yourself into more debt without increasing the value of your home. I’ve seen people taking out second mortgages to pay for new toys like a boat….that is the worst possible thing you could do. Burying yourself in debt buying items you can’t afford is one of (in my opinion) the main reasons our economy nearly collapsed in 2008. Too many people were given mortgages that they truly couldn’t afford because the banks were able to back these with imaginary money. We all see how well that played out and since then it’s become increasingly difficult to acquire credit, especially for larger purchases such as house or a property.
If you’re going to take a second mortgage it should be for a practical purpose that actually provides you with a return on investment. Using this money to upgrade your home’s value would be the best course of action. Whether you need a new kitchen, a paved driveway, or even an in ground pool installed all of those make more sense than a frivolous purchase that will depreciate in value quickly. The lender is going to be much more willing to approve your mortgage application if they know the money is going to be used to increase to value of the home the mortgage is held against. Given that home values should continue to rise you could almost justify one of the above purchases as a solid investment. While it may not make you a bundle of cash I’m sure everyone in your home would greatly benefit from a new pool on a day to day basis. Sometimes your return on investment doesn’t have to be strictly financial gain. Life is short and whatever you can do to increase your ability to enjoy every day is a smart decision!
If you are tossing this idea around and want to make upgrades to your home we highly suggest looking at having a pool constructed. This can bring the biggest increase to your home and property value over just about anything else. I live in Chattanooga, TN and actually have an in ground pool myself. It’s complete with a wonderful stamped concrete deck that looks just like a real wooden deck! The guys at www.chattanoogapoolservices.com did my pool and I couldn’t have been happier with their work. Mention that you saw them on AmericaPrivateBanking and I’m sure you’ll be given the white glove treatment.
Enough about me rambling about how much I enjoy my pool and let’s get back to how you can get your own. Make sure you do your due diligence when searching for a lender and compare their rates and terms. Try to negotiate with them, tell them you’ve gotten a better offer from someone else and you’d like to see if they can beat it. (even if you have to bluff, this tactic can work wonders and not just in the mortgage game!) Make sure you’re clear that the loan will be used for home improvements and you could even bring an estimate from your local pool construction service so they know you’re serious. This should go a long way in getting you approved, especially if you don’t really have much equity in your home to borrow against.
If you run into any issues or would like some more personalized advice feel free to reach out to me via e-mail and I’ll be happy to assist. While I can’t promise to get you approved I can promise to do my best to guide in the right direction towards getting exactly what you want! I didn’t start a banking blog on a whim, I actually do have some valuable insider knowledge and am more than willing to share it with those in need.