What is Needed for a Second Mortgage Approval

Here is a summarized and slightly different take on a post that was written by (myself) Brampton Mortgage Broker - Rumy Gill and posted to my website that discusses what is needed for a second mortgage approval.

Your can go to post directly and read it the post in its entirely by clicking the link below, or you can continue on reading a slightly differed version of the post here.

https://www.bramptonmortgagebroker.com/what-do-you-need-for-a-second-mortgage-to-be-approved/

Before we can get into what is needed for a second mortgage, we will need explore what a second mortgage is. Let cover the basic overview of a second mortgage so you can get a better understanding of a second mortgage.

What is a Second Mortgage?

A second mortgage is when an additional mortgage is taken out on your home when there is already a mortgage on the your home. The second mortgage is then placed in second position behind the first mortgage that is already in place. Simply said, a second mortgage is another form of refinancing your mortgage without breaking your first mortgage.

Why Would You Get a Second Mortgage?

Now that we know a second mortgage is essentially another form of refinancing your mortgage, then why would you get a second mortgage and not refinance instead? Well, often at times a second mortgage is obtained because refinancing your mortgage or paying off your first mortgage will prove to be costly. If you are locked into a mortgage for a 5 year term and you need to refinance before your term is up, you can be subject to high penalties for breaking the mortgage.

So if you are looking for financing to get cash immediately then getting a second mortgage just makes more sense. This is because you can line up your second mortgage term to run with your first mortgage and then be able to refinance into one mortgage without high penalties.

Here are some reasons for why you would get a second mortgage.

• You need immediate cash for an emergency.
• You want to pay off high interest debts.
• You want to consolidate all your debts into one payment.
• You are looking to make a large purchase.
• You are looking to make an investment.
• You are looking to complete some home repairs.
• You are looking to complete some home renovations.
• Or for any reason you need to get cash quickly without breaking your first mortgage.

How is a Second Mortgage different than a First Mortgage?

Here a few ways how a second mortgage is different from a first mortgage.

• Interest rates: Second mortgages have higher interest rates than first mortgages as they are considered to have a higher risk for default payments and therefore are considered more of a risk.
• Loan to Value (LTV): Loan to value (LTV) is the total amount of mortgages, loans, or liens registered against the value of your home. Second mortgages allow you to get a mortgage up to 85% loan to value (LTV). Where as first mortgages when refinancing will allow you to get a mortgage up to 80% loan to value (LTV).
• Easy Approval: Compared to a first mortgage a second mortgage can be obtain fairly easily. Regardless of your credit or income situation, you can be approved for a second mortgage financing with just the available equity in your home.

Types of Second Mortgage Options

Did you know that when it comes to getting a second mortgage that you have many options available to you in the form of financing options. Below are some of the types of second mortgages that are available for home owners like yourself;

• Home Equity Line of Credit (HELOC)
• Home Equity Loan
• Debt Consolidation
• Home Renovation Loan

What is Needed to Qualify for a Second Mortgage?

Now to get to the answer of the question that was asked in the beginning, what is needed to qualify for a second mortgage. The main requirement you will need to for a second mortgage approval is having available equity in your home so you can obtain the loan to value (LTV) you desire. Credit and income are not a requirement in obtaining a second mortgage approval.

Our team at Brampton Mortgage Broker can help you with qualifying for a second mortgage. We have a large network of second mortgage lenders who we can leverage to get you a approval for your situation.

So if you do not qualify with your bank for a refinance because there is a large penalty to break your mortgage, or you have too many debts, have bad credit, or bruised credit, have issues with your income or just need quick financing our team can help get the financing you need. Call or contact us today, and let our team at Brampton Mortgage Broker help you get the best second mortgage for your financial situation.

Rumy Gill | Google 5 Star Reviewed

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