Fixed Rate Second Mortgages | SecondMortgages.com.au

Fixed rate second mortgages have a pre-determined interest rate and a fixed term of loan. Fixed rate second mortgages enable you to determine the exact total of your monthly payments. Since the interest rate is fixed, the required payments will not fluctuate.

Fixed rate second mortgages also enable you to determine the time frame in which you will be able to pay off the whole amount of the principal and the interest. Knowing the time frame allows you to make your own calculation of the monthly payments. Another advantage of this type of second mortgage is that they are usually available in lump sum amounts. You can use this lump sum for other purposes aside from loan payments and home financing.

There are several types of fixed rate second mortgages. These include: 30-year fixed rate mortgages, 15-year fixed rate mortgages, biweekly mortgages, and "convertible" mortgages. 30-year mortgages are the most common type of fixed rate second mortgages. 30-year fixed rate second mortgages have the lowest monthly payments and have a pre-determined monthly payment schedule. One drawback of this type of fixed rate mortgage is the higher amount of accumulated interest.

15-year fixed rate second mortgages enable you to own a house in a shorter time with less accumulated interest than a 30-year fixed rate second mortgage. You can also shorten the term of this type of mortgage by increasing your monthly payments by 10 or 15 percent. 15-year fixed rate second mortgages allow you to own a house before you retire or before your children go to college. This helps make your financial status more secure in the future. Higher monthly payments are one disadvantage of this type of fixed rate second mortgages. However, getting a 15-year fixed rate second mortgages is a good option if you want to own a house in a shorter time at a lower accumulated interest.

Biweekly mortgages decrease the loan term to 18 or 19 years by requiring payments of half the monthly amount every two weeks. Biweekly payments add to the annual amount paid by about 8 percent. They also enable you, in effect, to make 26 biweekly payments (13 monthly payments) each year. The shorter loan term significantly lessens the accumulated interest of the loan. You can also further decrease the interest of a biweekly mortgage by applying each payment to the principal by which the interest is calculated every two weeks. Your eligibility for this type of fixed rate second mortgage is determined through a 30-year term. Many lenders of this type of mortgage also allow you to convert to the usual 30-year fixed term mortgage with no loss on your part.

Fixed rate second mortgages can be acquired from the following institutions and agents:

Solicitors' offices. Some solicitors' offices will lend second mortgage loans for private investors.

Finance brokers. Finance brokers could refer you to solicitors who lend second mortgage loans or to alternative lenders of second mortgage loans.

Vendors. You can also choose to negotiate for a second mortgage with the vendor of the property that you want to buy. You should be willing to offer the vendor an added rate of at least 4 percent above the normal variable rate of the mortgage.

Fixed rate second mortgages have a pre-determined interest rate and a fixed term of loan. Fixed rate second mortgages enable you to determine the exact total of your monthly payments. Since the interest rate is fixed, the required payments will not fluctuate.

Fixed rate second mortgages also enable you to determine the time frame in which you will be able to pay off the whole amount of the principal and the interest. Knowing the time frame allows you to make your own calculation of the monthly payments. Another advantage of this type of second mortgage is that they are usually available in lump sum amounts. You can use this lump sum for other purposes aside from loan payments and home financing.

There are several types of fixed rate second mortgages. These include: 30-year fixed rate mortgages, 15-year fixed rate mortgages, biweekly mortgages, and "convertible" mortgages. 30-year mortgages are the most common type of fixed rate second mortgages. 30-year fixed rate second mortgages have the lowest monthly payments and have a pre-determined monthly payment schedule. One drawback of this type of fixed rate mortgage is the higher amount of accumulated interest.

15-year fixed rate second mortgages enable you to own a house in a shorter time with less accumulated interest than a 30-year fixed rate second mortgage. You can also shorten the term of this type of mortgage by increasing your monthly payments by 10 or 15 percent. 15-year fixed rate second mortgages allow you to own a house before you retire or before your children go to college. This helps make your financial status more secure in the future. Higher monthly payments are one disadvantage of this type of fixed rate second mortgages. However, getting a 15-year fixed rate second mortgages is a good option if you want to own a house in a shorter time at a lower accumulated interest.

Biweekly mortgages decrease the loan term to 18 or 19 years by requiring payments of half the monthly amount every two weeks. Biweekly payments add to the annual amount paid by about 8 percent. They also enable you, in effect, to make 26 biweekly payments (13 monthly payments) each year. The shorter loan term significantly lessens the accumulated interest of the loan. You can also further decrease the interest of a biweekly mortgage by applying each payment to the principal by which the interest is calculated every two weeks. Your eligibility for this type of fixed rate second mortgage is determined through a 30-year term. Many lenders of this type of mortgage also allow you to convert to the usual 30-year fixed term mortgage with no loss on your part.

Fixed rate second mortgages can be acquired from the following institutions and agents:

Solicitors' offices. Some solicitors' offices will lend second mortgage loans for private investors.

Finance brokers. Finance brokers could refer you to solicitors who lend second mortgage loans or to alternative lenders of second mortgage loans.

Vendors. You can also choose to negotiate for a second mortgage with the vendor of the property that you want to buy. You should be willing to offer the vendor an added rate of at least 4 percent above the normal variable rate of the mortgage.