In Ontario, a second mortgage on a property title will appear as a separate charge on that property but does not change the first mortgage. Since there is higher risk to the lender, taking a second mortgage typically has a higher rate of interest.
A second mortgage can allow homeowners to use the equity that they have in their home. If your first mortgage has high pre-payment charges, or a low rate, a second mortgage can be a better option than a refinance. This option may also be best for those who are self-employed, have bad credit, or for those in need of fast cash.
What are the Benefits to a 2nd Mortgage?
In times of urgent financial needs, a second mortgage is one of the legit and quick sources of finance for you. The urgency could be anything ranging from a medical emergency or a credit card repayment deadline.
Lower Interest Payment
As mentioned above, if the interest rates in the economy are lowered, then it's the best time for any home owner with ample equity to go for a second mortgage as it saves the net interest payable on the primary mortgage.
The interest paid towards a second mortgage in can typically be claimed on your income tax.
There aren't a lot of lenders who will provide second mortgages as it does increase the lenders risks - if you default. In the case of default or bankruptcy, the first mortgage lender gets paid before the second position mortgage lender. However there are options for 2nd mortgages, and it is important to shop around and find what fits your needs best. That's where I come in, I can do the shopping for you to find the right solution for your needs.
Call me to discuss further or to start your application.
Meghan Van Houten - Mortgage Agent
416-709-9062 | 1-877-366-3487
Independently owned and operated
202-120 Traders Blvd. E., Mississauga ON L4Z 2H7