Mortgage Blog

In simple language, 2nd mortgage is the mortgage that is taken out from your property’s equity that already has 1st mortgage on it. There are two types of 2nd mortgage 1. HELOC(home equity line of credit) and home equity loan.  

 
Difference between 1st and 2nd Mortgage: - 

Main differences between 1st and 2nd mortgage are homeowner take a loan to purchase home is called 1st mortgage and it has longer repayment period like 20 to 25 years. While 2nd mortgage is the mortgage that you taken out from equity you have in your home. In 2nd mortgage, the amount you can borrow it depends on your equity in your home. Usually, homeowner take 2nd mortgage to pay off high interest credit card bills, home improvement, investing in property, consolidation of debt, paying tuition fees, taxes etc. 

When to get 2nd mortgage:-

Second mortgage is excellent choice when you want to invest in property, pay off high interest credit card balance, consolidation of debt, home improvement, use for emergency funds etc. you can use funds anywhere as you like. Usually, 2nd mortgage interest rate is higher than 1st mortgage interest rate but lower compared to credit card and other types of loans. How much amount you can get from 2nd mortgage it depends on your credit score, equity on your property. Most of cases we do not require appraisal, credit check, no application and no job verification*. 

Are you eligible for second mortgage: - 

There are many factors that involve to determine whether you are qualified for 2nd mortgage or not. Main factors are as follows:  

1. Equity on your home : - lender is also going to check your equity again higher = better                          

2. LTV (loan to value ratio) : - its ratio between current loan balance and your property appraised value. 

3. Credit score: - lender is going to check your credit score (Higher = better) 

4. Appraisal may be required as per lender‘s requirements*.