We are Second Mortgage Specialists.
A second mortgage is a simple interest loan that is placed in second position on the property title. Second position means upon the sale of your home, your first mortgage will be paid in full, prior to the second mortgage being paid off. It is simply another mortgage on your home, and is a loan secured against the property. A second mortgage can be used for a variety of financing needs, including investment in a business, home improvement, debt consolidation loans, or to provide cash.
If you are applying for a second mortgage, you are not obligated to explain your situation. The second mortgage is based on the equity in your home, and not your credit. There are two reasons why a client would want a second mortgage rather than redoing their existing first mortgage. The first is that a second mortgage is fast and simple, as approval is based on the equity in the home rather than your earnings, job stability, credit history, and whether or not support payments are being received or paid on time. The second reason is that a client might prefer not to adjust their current first mortgage loan, for whatever reason.
A second mortgage normally has a repayment term much shorter than a first mortgage and a close-end credit arrangement with a predetermined repayment or amortization schedule. The holder of a second mortgage has rights secondary to the holder of a first mortgage lien in the event of foreclosure. In a second mortgage, interest due is computed on the entire principal balance owed, which is advanced to the borrower after the required three-day rescission period. The interest rate for a second mortgage is usually fixed, with a choice of term lengths that range up to one year. Interest paid on a second mortgage may be tax-deductible provided that the loan is on your primary residence. The interest rate charged for the second mortgage tends to be higher, and the amount borrowed will be lower than for the first mortgage.