What About Second Mortgages?
Private mortgages are often sought out when a family has a financial need or emergency and the existing first mortgage either has a great interest rate, the penalty to refinance the first mortgage is extremely costly, or they are declined by the banks due to one or more of the following reasons:
- Poor credit
- Bad credit
- Low credit
- No credit
- New credit
- Past bankruptcy
- Behind on mortgage or property taxes
- Maxed out credit cards
- Income tax arrears
- Self employed and can’t prove income
- Too much debt
- Too many properties
- Little or no down payment
Second mortgages are usually private mortgages that enable you to use the equity in your home to consolidate debts, pay off consumer proposals, complete home renovations, pay unexpected expenses, as well as provide down payments for investment properties.
Second mortgages can be an incredibly powerful tool when used appropriately; however, they can be financially destructive if not used wisely.
Advance planning and a sound exit strategy will ensure that you will avoid the common mistakes made by those who have borrowed from private lenders.
If the second mortgage is required for investment purposes, we highly recommend that your plans include at least one of the following exit strategies.
- The profits from the sale of the investment property will be sufficient to discharge the second mortgage.
- You can combine both mortgages into one brand new mortgage at a low interest rate.
- You will be expecting a lump sum of money that will be used to discharge the second mortgage.
I can help you to find a lender who will approve you for a mortgage with:
- No minimum beacon score requirement
- No credit requirements
- No income confirmation
- No GDS/TDS ratio requirements
- No need for landed status
- Unfiled Income taxes
- Previous mortgage declines from other mortgage brokers and banks