A second bond is normally used for making repairs or upgrades to the property. You are able to use the second bond for anything you want, not just home improvements. Seconds bonds are used for sending children to college as well as for eliminating high interest debt.

Second bonds are based solely on the properties equity. Be careful about removing home equity for the wrong reasons. You have to keep in mind that you will be paying interest on this money you have accumulated. If you are planning to make improvements on the home or to do some needed repairs then you will be increasing the home equity. If you use the loan for any other reason you are simply losing the equity you built and will leave yourself no easy way to build new equity.

If you used the homes equity to pay student loans or to take a vacation then it is lost forever. You might find that upon selling the property that after closing you walk away empty handed. The point of owning a home is that it is an investment, so treat a second bond as an only if completely necessary option. If the home needs a roof or you would like to add a room then the 2nd bond would be increasing equity in the home and would be a good investment move.

You primary mortgage company is not your only choice. You can shop around for the best rates from many banks, credit unions, or even other mortgage companies. Just like your primary bond the 2nd bond will have terms and other features to the quote you need to have specified by the lender.

Most places have slightly higher interest rates for secondary bonds. You may also find that some companies will offer you 100% of your equity as available for lending while others normally allow 85% or less. Be very cautious of the 100% lenders as they will have much higher interest rates and you also are using all your equity that took years to build.

The property will be appraised by a professional to determine its current value. The appraiser will check surrounding properties as well as inspect the quality of yours. The lender will be given the information so they can determine what the available equity amount actually is. Remember, most will not lend 100% of the total equity, only a portion.

The appraiser will check recent prices of surrounding homes that are similar to yours as well as check your properties overall condition. The better the appraiser feels about your property the more you will be able to gain in equity so be sure to take care of any minor repairs or damages. Simple things such as replacing a broken window or torn screen can earn you money. When the appraiser enters your home if he notices clutter, weeds, chipped paint, or hanging gutters you will lose hundreds and maybe even thousands of dollars towards your equity.

In order for your home to be assessed properly be sure to inform the lenders and the appraisers of the improvements that are going to be made. Having a permit and a blueprint of the improvements will help a great deal in gaining the equity points for your 2nd bond.

Susan Reynolds is a content coordinator a leading South African bond origination portal. For more information visit: http://www.bondcredit.co.za/