Second Mortgages
Debt Consolidation, Pay Taxes Owed, Home Renovations, Financial/Credit Restructuring

Interest-only second mortgages are registered behind first mortgages and used by the homeowner to access the equity in their property without disturbing the existing mortgage. There are many reasons why taking out a second mortgage makes more sense than refinancing the first mortgage. In situations where the first mortgage is currently set up with either a low-interest rate, and or the penalty involved with breaking the mortgage is considerable, you may want to leave the first alone. Another common reason why a second mortgage makes sense is when the borrower is not in a position to qualify for a new first mortgage but needs to access their equity. Second mortgages can be placed on either a primary residence or investment property.

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Most second mortgages on residential properties range from 40K to 150K, but this can vary depending on the need. The maximum loan amount available largely depends on the amount of the 1st mortgage in conjunction with the current value of the mortgaged property.

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Second mortgages can be customized to suit an individual's specific needs. These loans can be set up as either mortgages or secured lines of credit that can be drawn on again as you pay the balance down. We can also arrange for the mortgage payments to be pre-paid upfront so that no monthly payments are required. For example, if the monthly payments required on an 80K second mortgage were $833/month, we could set up a 90K second mortgage instead and add that $833 x 12 months of payments onto the mortgage.

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Second mortgages are not intended to be there forever and are generally paid out within a few years at the most. The most common strategy for paying off a second mortgage is to refinance the first mortgage on the property when it is due to mature and increase the loan amount by what is needed to payout the second mortgage. This is often referred to as an exit strategy, and it is essential to have one so that you do not get stuck having to renew these interest-only mortgages each year, as many are subject to high renewal fees.

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Rates and Fees for second mortgages are determined on a file-to-file basis based on the strength of the application.