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 secured by one asset where the 2nd mortgage lenders have a ranking on the property behind 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 mortgage lenders can be repaid. 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 providing there is sufficient equity. Benefits of this funding are:
- The loan to value or LVR ratio is up to 75%
- Quicker turnaround times
- Simple lending eligibility criteria
- Minimal application submission time
- Loans up to $500,000 dollars
- Loan term for one month to 1 year
- The interest rate is from 1.95% per 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 5,000
- 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.
- Fixed Rates
If your first mortgage funding is against a fixed-rate loan, there will be high exit charges, so it is better to leave the first mortgage in place until the fixed rate term expires. In this scenario, you can borrow extra funds by using a 2nd mortgage loan.
HomeSec can provide funding for 2nd mortgages within 24 hours, as a private lender we can fund much quicker than getting the approval through any traditional bank.
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 assisting with cash flow.
Getting access to the asset or property equity means the business owner can consider consolidating debts.
Options for Refinancing
Second mortgage funding also offers an option when refinancing the current first mortgage would involve exit fees, various legal fees, and penalties for early repayment.
You can also do the necessary renovations to your commercial space or business premises using second mortgage funding.
But remember, second mortgage loans from HomeSec come with higher interest rates than traditional first mortgage funding. 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 competitive interest rates.