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Second (2nd) Mortgage

Second (2nd) Mortgage Options at CVE Mortgage Group

When you need money, sometimes a second mortgage is the answer. A second mortgage, generally speaking is a home equity loan against owned property. Whether the reason is an emergency situation, or if you are consolidating credit card debt, a second mortgage can be beneficial.

Because these mortgages are primarily based on equity in the home, credit and income are normally not a factor.  Most second mortgages carry interest-only payments, so based on typical second mortgage rates today, your payments will be around $100 per month for every $10,000 that you borrow.

Owning at least 20% of your home is usually a key factor for approval. If you don’t have 20% equity in your home, it is more difficult, but still possible depending on other factors involved for approval.


Advantages and Disadvantages of Second Mortgages/ Home loans

There are several advantages to obtaining a second mortgage. The first advantage is that there are a variety of ways you can use them. You can use the funds to consolidate higher interest debt, pay unexpected expenses, repay and eliminate court judgements, liens or unsettled collections. They can also be used as a temporary solution if you need funds now, but your existing first mortgage isn’t maturing for several years, or maybe there is a large penalty to get out of the existing first mortgage.

While there are advantages to obtaining a second mortgage, including any of the reasons listed above, there are also a few disadvantages that you should be aware of, and discuss with your mortgage broker.

It is important that all individuals seeking a second mortgage understand that the first mortgage on their home is in the position to be paid off first.   If you take out a second mortgage, you will have two mortgage payments each month, and that is something that you’ll have to keep in mind and consider as you complete the application process. Yet another drawback is that second mortgages have higher rates than typical first mortgages; it costs more, but interest rates may be lower than those on credit cards and unsecured personal loans.  Finally, the associated costs may include second mortgage fees, in addition to the other closing costs.

A second mortgage should not be considered a permanent solution, but rather a stepping stone to get you to the ideal financial position in the future. The ultimate goal should be to refinance a first mortgage down the road to consolidate the existing first mortgage and the temporary second mortgage in order for you to pay off your mortgage in the most efficient manner.


Steps to Qualify

During the qualification process, lenders look at how much equity you’ve accumulated in your home. Some lenders do consider income, but the majority of lenders through CVE Mortgage are equity based lenders,(equity being the appraised value of your home less existing mortgages on the property). In almost all cases, poor credit and even lack of income can be overlooked and you can still get approved for a second mortgage.

Like a first mortgage, a second does have closing costs that some estimate can run up to five percent of the value of the second mortgage. Fees and costs associated with closing on a second mortgage, no matter why a borrower might use it, include a home appraisal fee, legal fees and title-related costs (like the title search and required title insurance.)


Second Mortgage Process

Attaining a second mortgage can be fairly simple and just takes a few simple steps:

– contact us so we can collect pertinent information like your name, address, date of birth, employment information, etc

– after a quick analysis (same day) we will determine if a second mortgage is a suitable option for you

– next, we set up an appraisal on your property through a lender approved appraiser

– once the appraisal is received, we determine how much equity (home appraised value less mortgage balance) you have to borrow against

– after this we sign the necessary documentation, and within approximately 10 business days you will have the second mortgage funds in your hands!


If you’re interested in getting a second mortgage on your home, contact us to see how we can help. Call 519-501-7758 or 888-593-9280 to speak with Colin Eby, Owner and Mortgage Broker.

Alternatively, you can fill out an application right at our website, and we normally will have an approval for you within 24 hours!