There are a number of reasons why someone may be interested in a second mortgage. Sometimes it doesn’t make sense to break a first mortgage due to a large penalty, especially if their current credit situation will not allow them to get a rate similar to what they currently have. Or perhaps the funds are only needed for a very short period of time.
In situations like these, a second mortgage may be the answer. Depending on the situation, there are various options such as a Home Equity Line of Credit which is an inexpensive way to borrow the funds or a second mortgage through an equity or private lender. Rates and maximum loan to value for second mortgages are on a case by case basis, so it’s best to contact me so we can discuss in detail.
It’s very important that you make a educated decision when it comes to second mortgages especially if it’s held by a private lender. You want to have an exit strategy in place so that it can be paid out as soon as possible, since a second mortgage is more expensive than a first mortgage.