What is a Second Mortgage?

Many people want to know what is a second mortgage and how can I get a second mortgage; the following is an easy to understand explanation.

A second mortgage is a mortgage that is behind the first mortgage in terms of priority of repayment. When a person buys a house or any property they usually need to borrow some of the money from a lender, which then becomes the first mortgage. A second mortgage is money that is usually borrowed at a later date and is usually smaller than the first mortgage. The mortgage that is registered on title first is the first mortgage the next registered mortgage is the second mortgage and so on.

There are no strict rules regarding second mortgages since most second mortgages are funded by private lenders that have their own individual loan criteria, below are the general guidelines that most second mortgage lenders follow. Lenders want homes or properties that have a loan to value ratio below 80%, in some cases the lenders will go up to a 85% loan to value ratio. For most private lenders the loan to value ratio is the most important factor when providing a loan.

Your credit score will be a factor in determining the interest rate charged. A bad credit score will not disqualify people from getting a second mortgage. Your ability to pay for the second mortgage is very important, lenders want to know you can make the monthly payments and that you will not default on the loan.

The next step is to give us a quick call and we can confirm your mortgage within a few minutes.