Gain Access to Your Home Equity through Second Mortgage Loans
A 2nd mortgage loan is known as a loan against a property for which there is already a first mortgage. It means there are two types of loans incurred on one asset where the 2nd mortgage lenders have less authority on the property than the first mortgage lenders. So in case of any event when the borrower cannot repay the loan, the asset or the property gets sold. The first mortgage lender will get back their money first before second or third mortgage lenders can demand their repayments. But before opting for this type of business loan, you need to understand the process of applying for the funding and how they operate.
How does the process of second mortgage finances operate?
A second mortgage means applying for another loan on a property for which the borrower is already paying back the loan on the first mortgage. The second mortgage comes after the first loan in ranking. It means the first mortgage lender will get repaid if there is a default in payment and the property gets sold, and after that second mortgage lender will get the remaining amount. That is why 2nd mortgages are much tougher to get than first mortgage loans. But worry not as with HomeSec, the business owners are eligible for the second mortgage loans according to their preferences.
- The loan to value or LVR ratio is up to 80%
- Quicker turnaround times
- Simple lending eligibility criteria
- Minimal application submission time
- Loans up to $1.5 million dollars
- Loan term for one to 3 years
- The interest rate is 1% every month
Different Types of Assets to Submit for 2nd mortgage loans
Now let us take a look into the various property types that you can submit as 2nd mortgages.
- Residential assets in the metropolitan areas
- Commercial properties
- Vacant land in the metropolitan cities
- Residential or rural assets with a population of more than 50,000
- Industrial assets
- Development sites that are subject to term and conditions
Why use second mortgage funding for Business finances?
Most business owners prefer refinancing their loan to another lender rather than obtaining funding from the 2nd mortgage lender. However, there are certain circumstances where the option of a second mortgage loan is more suitable. Below we have mentioned some of those situations.
If you are assisting your children in purchasing their first asset, then you can act as a guarantor against their loan by putting your home as a second mortgage over their assets or properties.
If your first mortgage funding is against a fixed-rate loan, there will be high exit charges, or you might also want to refinance it as the fixed rate is much lower than the present variable rates. In this scenario, you can borrow extra funds by using a 2nd mortgage loan.
HomeSec implements several advanced 2nd mortgages funds within two days that can put the approval process of any traditional bank behind.
Advantages of Second Mortgage Funding
Many other business owners opt to take a loan from the 2nd mortgage lenders for various reasons. We have mentioned some of the benefits of second mortgage loans as follows.
A second mortgage funding allows the business owner to access the property or asset equity for liquidating the cash flow.
Getting access to the asset or property equity means the business owner can pay the consolidating debts.
Options for Refinancing
Second mortgage funding also offers an option to refinance which involves exit fees, various legal fees, and other exit fees.
Home Repairs or Renovations
You can also do the necessary home repairs or renovations, enhancing the asset or the property value.
But remember, second mortgage loans from HomeSec come with higher interest rates. Thus you should ensure that you can repay the entire amount within the specified time with no additional penalty. A second mortgage financial solution is not usually available through mainstream lenders. Thus you can take the help of HomeSec, which has become one of the pioneer financial institutions in the mortgage industry. So if you are also in need of some immediate cash flow, opt for our 2nd mortgage funding with a high LVR ratio and lower interest rates.