Second mortgages can be very useful for a few reasons. If you need to take some equity out of your property (commercial or residential) but have a large penalty to break your first mortgage, you may want to consider a second mortgage to avoid the penalty.
If you are self-employed and can’t verify your income in the traditional manner, you may want to consider a 2nd mortgage, as private lenders have a lot less restrictions when it comes to qualifying. This is often a great way to purchase a home. You could do a first mortgage through a financial institution and a second through a private lender.
If you have credit issues & think it’s unlikely that you’d qualify with a financial institution, chances are you may qualify for a second mortgage, provided that you have sufficient equity in your property.
Second mortgages are also available through some financial institutions, but there are more restrictions. However the interest rate and fees will also be lower. The maximum loan to value the institution can lend is 80% on a refinance. Gone are the days of 95% loan to value. Private lenders can go higher. I have done 90% on a refinance on nice properties in good locations.
If you are considering a second mortgage, contact me today for a free, no obligation consultation. 1.877.336.3545 or DonnaL@dominionlending.ca