Home equity loan
2nd & 3rd Mortgages
How much are you looking to borrow?
Need a loan with flexible lending criteria and negotiable terms?
Need it done fast? We can help find the financial solution that works for you, with a 2nd or 3rd mortgage from an institutional or private lender. We also fund privately with our own capital.
You can access the equity in your home without having to refinance your current mortgage and paying higher rates and penalties.
A home equity line of credit (HELOC), is a type of a second mortgage that is a revolving line of credit, available to you as you need it, as opposed to a lump sum loan. It’s still secured against your home.
Because second and third mortgages are a higher risk to lenders, the interest rates are higher than first mortgages.
Under the right circumstances, a second mortgage makes a lot of sense, and can actually save you money. It can also be a good way to build your credit, as long as you are paying on time. Although second and third mortgages often have higher interest rates than a first mortgage, the rates are still lower than most credit cards, unsecured lines of credit, or business loans. Here are a few reasons you might want to take out a second mortgage.
Whether you are buying a second property for leisure or extra income, if the purchase price of your property is $1 million or more, you will need 20% as a down payment. Even if it’s less than $1 million, you’ll need to come up with 20% of the property’s value for your down payment if you want to avoid having to pay for mortgage insurance.
Sometimes those expensive repairs or renovations can’t wait and you need to come up with the money fast. You’re ready to sell your home and want to renovate it to increase the value. Maybe you’ve decided to put in a basement apartment to generate some additional income.
Tuition is very expense and continues to rise. A second mortgage will help you pay for your child’s college or university tuition, or your own education so that you can improve your skills and get a better job.
Although second mortgages have higher interest rates than first mortgages, the rates are still typically lower than the interest you would pay on a credit card, unsecured line of credit, or a car lease. So, it’s a great way for homeowners to save money by consolidating high interest debts into one monthly payment that has a lower interest rate.
Second mortgage loans can help you start up a new business. Second mortgages can be cheaper and easier to get than business loans.
If you want to access to the equity you have in your home but are in the middle of your mortgage term, taking out a second mortgage can help you avoid paying the high penalties and administration fees associated with breaking and/or refinancing your current mortgage.
What is a Second
Mortgage?
A second mortgage is a home equity loan that allows you to borrow money based on the equity you have in your home, without having to refinance your current mortgage. Equity is the difference between the appraised value of your home and the amount you owe on your first mortgage.
A second mortgage is not the mortgage on a second property. The term “second” means that the loan does not have priority on your home in case you default on your mortgage payments. If you were to default, your first mortgage has priority and that loan would be paid off before any funds go towards the second mortgage. A third mortgage would be subordinate to the first and second mortgages.
You will need to have enough equity in your home to support a second mortgage.
Because of the risk involved to lenders, they want to see that you have a dependable source of income to ensure that you can make the payments. If you are self-employed, retired, or are approaching retirement you may not qualify.
You will need to have a good credit score in order to qualify. Your credit score will also impact your interest rate. The higher your score, the lower your interest rate.
Lenders need to secure their investment in case you are not able to keep up with the mortgage payments. They will be looking at the value of your property.
What you will need to qualify for a second mortgage?
There are four things that lenders will look at to qualify you for a second mortgage:
Frequently asked questions that can help you start your mortgage journey with us.
Contact Benson Mortgages specialist.
We offer a broad range of services to cater to different financial needs. Our services include residential mortgages for those looking to buy a home, refinancing for those who want to take advantage of better interest rates or terms, and transfers & HELOC for homeowners who want to leverage their home equity. We also provide private mortgages, 1st, 2nd & 3rd mortgages, reverse mortgages for seniors, commercial financing for businesses, and construction & land financing for developers.
A residential mortgage is a financial product that allows individuals to purchase residential property. The property is used as collateral for the loan, which is repaid over a specified period up to 40 years or interest only. The borrower makes regular payments to the lender, including the principal amount and interest.
A fixed-rate mortgage has an interest rate that remains the same throughout the loan term, providing stability and predictability for your payments. On the other hand, a variable-rate mortgage has an interest rate that can change over time based on market conditions. This means your payments could increase or decrease. The choice between the two depends on your financial situation, risk tolerance, and market expectations. There is also a variable rate mortgage with a fixed payment.
Refinancing a mortgage involves replacing your current mortgage with a new one, often with different terms or a lower interest rate. Refinance can be a good idea if you can secure a lower interest rate, and want to change the term length of your mortgage. You might need to access equity in your home in order to pay out debt, buy investment property or any other investments, pay for your kids' school or to renovate your home.
Secured Line of Credit is a type of loan that lets you borrow against the equity in your home. It works much like a credit line, where you have a credit limit and can borrow as much or as little as you need up to that limit. You only pay interest on the amount you borrow. It can be used for various purposes, such as home improvements, debt consolidation, or even to fund a business venture.
A private mortgage is a loan provided by a private entity or other financial institution, such as an individual or a business, rather than a traditional bank. People often choose private mortgages when they have unique financial circumstances that make it difficult to qualify for a traditional mortgage, such as being self-employed or having a less-than-perfect credit history. Private mortgages offer flexibility and can be customized to meet the borrower's needs. Private mortgages are used for the properties that do not meet banks criteria: land, properties under construction, agricultural properties, sub-divisions, etc
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