Second Mortgages Kingston Explained

Second Mortgages Explained Kingston

Second Mortgages explained Kingston Ontario Information

Second Mortgage Information

What Is A Second Mortgage

A second mortgage as the name would suggest comes after your first mortgage. But what does that mean? For you it really means nothing if you make the payments. The term second mortgage is really all about the lender. If you were to default on either of your mortgages and your home or property was to be taken into possession by one of the first or second mortgage lenders and sold. Then the second mortgage lender is second in line for any remaining proceeds after the first mortgage lender is paid out.

Second mortgages are sometimes called Home Equity Loans as they are advanced by second mortgage lenders against the equity you have build up in your home. The mortgage interest rates are usually higher because being second in line in the case of default the second mortgage lender takes more risk.


Second Mortgages Kingston Information

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 Second Mortgage Example

Lender Product Interest

Rate

Credit

Score

Minimum

Equity

Major Bank Home Equity

Line Of

Credit

2.5% 650-900 25%
Trust

Company

Second

Mortgage

15% 550-700 10-15%
Private

Mortgage

Lender

Second

Mortgage

10% Less Than

600

Less Than

10%


Second Mortgages Explained Kingston Ontario Questions

What Do I Need For A Second Mortgage

Home or Property Equity

The more equity you have in your home means less risk for the second mortgage lender so will increase your chances. Every second mortgage application is different but as a rule of thumb if you have at least 20% equity in your property things look good.

Here’s the great news! Because our agents are both licensed mortgage and real estate agents we can determine the value of your property before having to use the costly services of an appraiser. Thus saving you money and strengthening your chances of a successful second mortgage application.

Best of all our property evaluation if free of charge to out customers and always will be.

Verifiable Income

Much more so than a first mortgage, second mortgage lenders want to see proof of income and thereby the ability to service the loan. It’s always good to have copies of utilities, telecommunications, insurance and car financing bills attached to the application showing regular payments and your ability to do so.

Credit Score

As shown in the table above, your credit score will influence where you can go for a second mortgage and how high the interest rate will be. Lower credit score higher interest rate and vice versa. The good news here is that when structured the right way and with you making the right payments on time a second mortgage can help your credit score in the short term.

Other Mortgage & Debt Information

Make sure to have all your first mortgage documentation available for us. You will also need any documentation related to any other debts owed by you, this is usually credit cards for most people. Do your homework first by getting all this information as it will assist us in getting you the right second mortgage.


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Second Mortgage Broker Benefits For You

We are government licensed mortgage and real estate agents. After a confidential preliminary discussion over the phone with you we will quickly determine the best option for you going forward. Using a mortgage broker gives you choice and flexibility over your bank. As your bank is tied to it’s own limited products and many are designed to tie you to the bank. We have access to a vast array of lenders that can save you money and give you more freedom in the future.

Second mortgages are not a death sentence. There are many reasons people may need a second mortgage and yes, many of them may not be great. But here we like to turn lemons into lemonade. You might be surprised to know that structuring a second mortgage the right way can help your credit rating in the short term.

Who knew!

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