Our Blog

Second Mortgage Options
 February 9 2016     Posted by Steve Bucher

Ever wonder: What is a second mortgage?

In the most basic sense, a second mortgage is the second person to be paid, if the owner defaults on his mortgage payments. Most of us will have a first mortgage, but in cases where lenders do not want to lend more, we end up looking for a second mortgage.

In foreclosure, second mortgages, because they are paid out with leftovers after the “first” mortgage holder is paid out, are associated with higher fees and greater risk. The higher fee is related to the increased risk of being in “second” position, but also because of the reasons the “first” lender did not want to lend more.

Common reasons are:

  • location – small town or hard to sell area
  • income – hard to prove income
  • credit score – late payments, missed payments, collections
  • home condition – lenders like perfect homes, fixer upper specials may require a private money

Second mortgages often require fewer documents than a first mortgage, but they almost always require an appraisal. Second mortgages are all about your equity in the home… the more equity you have, the easier time you will have applying for a second mortgage.

If you are interested in more information on second mortgages, private lenders or a mortgage quote, contact me via email Steve.bucher@migroup.ca or phone 1-888-554-5899.

Bookmark and Share