Second mortgages are necessary because first mortgages often eat into most of your resources for between 15 and 30 years. A second mortgage allows you to do such things as expand your business, to deal with a medical emergency, to consolidate your high-interest debts, or to renovate your home. Other than helping you meet your financial needs, second mortgages are also important because the interest rates are lower compared to those of credit cards and unsecured credit cards, they help improve your credit score when you use the money to consolidate your debt, you can negotiate for flexible payment terms, and you avoid paying the CMHC (Canadian Mortgage and Housing Corporation) fees.
To qualify for a second mortgage in Toronto, you must own at least 20% of your property’s equity and you must prove you have a reliable income that is enough to cover the monthly interest payments. At Approved Mortgage Broker, we assist clients in Toronto and North York get second mortgages.
Reasonable Interest Rates: Interest rates on second mortgages tend to be higher than in first mortgages. This is because the lender of a second mortgage takes on a greater risk than the lender of a first mortgage given that they are in the second position on your property’s title. In other
words, the lender of the first mortgage would be paid off first in case of a default and the lender of the second mortgage second. Factors like the loan to value ratio (lenders prefer a ratio of 65% or below) and the location of the property (lenders prefer locations in cities and towns) all affect the interest applicable. We will negotiate with the lender on your behalf to ensure you get the lowest interest possible. Mortgages even with weak credit and little equity in the property. Most second mortgages are in the form of home equity lines of credit. Those with poor credit scores and little equity in their properties can get their second mortgages through private lenders or trust companies. Our team has long-standing relationships will all types of lenders, which ensures you get your second mortgage, no matter your needs or circumstances. Avoiding Hefty Fees -Second mortgages attract different fees. The most common administrative fees from Toronto lenders are appraisal fees, title search fees, legal fees, and title insurance fees. Some lenders waive some of these fees to attract clients. We will help you bag the best deals.