Second Mortgage Interest Rates

by Melodie
(Federal Way, WA King County)

Regarding second mortgage interest rates and fees: Kate, why are there so many fees on a 2nd mortgage loan? I don't understand why the interest rates are so much higher also. Can you help me

Dear Melodie, A second mortgage compared to a first mortgage is riskier for mortgage companies. That is because in the event of a foreclosure, the holder of the second mortgage has less chance of getting paid off than does a first mortgage investor.

This risk is passed on to the homeowner in the way of higher interest rates, more fees and even prepayment penalties.

However fees vary among lenders. Some of the big banks from time to time run specials on home equity loans. This of course depends on the state of our economy, appreciation or depreciation in the real estate market and the condition of the credit markets.

Closing costs also depend on the homeowner's credit file. The lower the credit score, the greater the fees. So if you are concerned with the second mortgage interest rates and fees you are being charged, talk with your loan representative.

And remember, you can ask your Realtor to review your good faith estimate or recommend another lender.

The following pages shed more light on mortgage fees. After reading through them, I hope you'll let me know if you have more questions.

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Don't miss checking this out on my real estate article site:
Understanding Mortgage Closing Costs - Let's learn to lasso mortgage closing costs once and for all.

Take a moment to bookmark Second Mortgage Interest Rates And Fees to your favorites and visit often for more tips about closing costs and good faith estimates. You can also invite friends to comment on this page or ask another question of their own like you did.

Best Wishes,

Your Online Mortgage Advice Friend


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