Second Mortgage

How To Get A Second Mortgage

 
Private mortgages are often sought out when a family has a financial need or emergency and the existing first mortgage either has a great interest rate, the penalty to refinance the first mortgage is extremely costly, or they are declined by the banks due to one or more of the following reasons.
 

  • Poor credit
  • Bad credit
  • Low credit
  • No credit
  • New credit
  • Past bankruptcy
  • Judgements
  • Behind on mortgage or property taxes
  • Maxed out credit cards
  • Income tax arrears
  • Self employed and can’t prove income
  • Too much debt
  • Collections
  • Too many properties
  • Little or no down payment
  •  
    Second mortgages are usually private mortgages that enable you to use the equity in your home to consolidate debts, pay off consumer proposals, complete home renovations, pay unexpected expenses, as well as provide down payments for investment properties.

    Second mortgages can be an incredibly powerful tool when used appropriately; however, they can be financially destructive if not used wisely.

    Advance planning and a sound exit strategy will ensure that you will avoid the common mistakes made by those who have borrowed from private lenders.

    If the second mortgage is required for investment purposes, we highly recommend that your plans include at least one of the following exit strategies.
     

  • The profits from the sale of the investment property will be sufficient to discharge the second mortgage.
  • You can combine both mortgages into one brand new mortgage at a low interest rate.
  • You will be expecting a lump sum of money that will be used to discharge the second mortgage.
  •  
    REICO can help you to find a lender who will approve you for a mortgage with:

  • No minimum beacon score requirement
  • No credit requirements
  • No income confirmation
  • No GDS/TDS ratio requirements
  • No need for landed status
  • Unfiled Income taxes
  • Previous mortgage declines from other mortgage brokers and banks
  •  

    REAL LIFE SCENARIO:

    This self-employed client had just recently started a full-time job one month prior to purchasing a home. Client was seeking 90% loan-to-value (LTV) with debt ratios of 45% and 45%, which can be difficult to place with any lender.

    Upon further discussions with the mortgage agent, the lender learned that the client was also a part- time independent financial advisor (100% commission), which generated a net income of $69K in the previous year. Although the client had just started his full time employment, his existing client base allowed him to continue to generate income as a part-time financial advisor. The client needed 90% LTV to make the deal work. The lender could only approve the client for a maximum of 80% LTV; however, they did make an exception to allow for a Private Second to be placed behind them for a total of 90% LTV.