When times get tough there might be a need to take out a second mortgage. If your credit isn’t top notch or your are not employed a bank is not likely to give you a second mortgage.

That is when people turn to private mortgages. The fees are between 1-3% and interest rates can be astronomical (10-18%).

A loan for $20,000 at 13% for 5 years will cost you $455 per month. Over the loan period, you will have paid $7,300 in interest and $400 in set up fees.

Private mortgages have high interest rates because their lenders are taking a greater risk. For some people, this might be their only option to pay their bills.

It is best to explore all of your options before resorting to a high interest loan to ensure all other options are exhausted. It is wise to look into what what this mortgage will cost you in the end.  At least then you will be making an informed decision when you sign the papers. Check out the Rate Hub website for more information on mortgages.

Questions? Give them a call at 1-800-367-2037.