Qualifying for a Second Mortgage in BC
2nd Mortgage Approvals Regardless of Income or Credit.
A Second Mortgage is a loan on the title of your home registered behind your first mortgage allowing you to refinance up to 70% of your homes value. 2nd mortgages are used to consolidate debts, home renovations, business capital and more. Providing you with significant cash flow relief by combining all your small debts into One Low Monthly Payment. Approved can take as little as 24 hrs. Great rate options for lower loan to values.
The major difference between a second mortgage and a HELOC are rates and fees. HELOC’s are also a re-advanceable charge where a home equity loan is a one time lump sum advance of money.
Worried about Age, Bad Credit or Income, don’t be, we can provide you with mortgage solutions solely based on your Homes Equity
How to Calculate Second Mortgage
Want to know how to estimate how much of a Second Mortgage you might qualify for?
Get A Calculator, here is how you calculate up to 75% Loan To Value:
75% x ($300,000) = $225,000 – ($200,000) = $25,000
Some lenders will go as high as 85% LTV you should call your Vancouver BC Mortgage Broker to help you prepare your Mortgage Application.
Top Reasons For Getting a Second Mortgage in BC
- Your current Mortgage interest rate is lower than it would be if you refinanced and added additional debt
Looking to consolidate outstanding debt into a new 1st mortgage may be more expensive than getting a 2nd Mortgage to consolidate that debt. Taking $50,000 of debt and refinancing it into a 2nd Mortgage at Private Mortgage rates may cost less than taking $300,000 1st mortgage and adding $50,000 to refinancing $350,000 at your banks best rate. Taking into account the term left in your Mortgage.
- Buying A home before selling your home. This is also considered Bridge Financing. You can use the equity in your home to buy another home using Inter Alia.
- Credit issues that will restrict you from qualifying for the lowest discounted rates.
Sticking with your current 1st mortgage rate and consolidating debt into a second mortgage can help to improve your cash flow and allow you to consolidate outstanding debts. Using this technique, you can improve your credit and be in a better financial possession to negotiate the best rate from the bank at the end of your term.
- You are Self Employed, and the banks debt service ratio is too restrictive in fully qualifying you
Many banks will only allow certain debt to service ratios. By qualifying a Self-Employed applicant for the maximum a bank will lend and topping up with a 2nd Mortgage to the private mortgage lenders qualification you sometimes can achieve a higher loan to home value.
- You have a unique property or location and the bank is unable or unwilling to finance adequately
Non-conforming homes and homes on unique properties pose challenges for conventional lenders to service to its true potential.
- You have issues showing income or providing proof of income.
Mortgages are based on your homes equity and certain lenders can qualify you sole on those bases.
- You are behind on your 1st Mortgage payments and facing a possible Foreclosure or Pre-Foreclosure. A Second Mortgage can help bring you up to date with your 1st Mortgage and allow you to restructure your other debts to help with cash flow and allow you to better service payment in the future.
- A 2nd Mortgage can free up money to start a new business or working capital.
Banks can have large guidelines for lending to new business start ups or working capital. Using your equity is a fast way to get money for small and medium sized business owners.
- 2nd Mortgages on Construction draws.
Had trouble completing a residential construction and the bank will not advance money to complete. Some lenders will advance a 2nd Mortgage on draw to help complete your project.
- Second Mortgages can be used to divide up assets from a divorce or pay alimony. Using your equity to divide up individual’s assets and obligation can be done easily. Just make certain that all obligations on the 1st Mortgage is fairly decided on before entering under contract.
What Is a Second Mortgage Loan used for?
Second Mortgage Loans can be used to enhance your current life style such as a loan for your wedding or a honey moon, new car or even take a vacation. Some use 2nd Mortgages to consolidate debt or pay medical bills, education or School Loans and most commonly a Home Improvement loan. Still others use a 2nd Mortgages for a Small Business loans, to inject new money into their current small business with the flexibility of Interest Only Payments. A 2nd Mortgage is one of the fastest and easiest was to extract your Homes Equity out of your home. The uses can be numerous, and they are your own.
What is Second Mortgage BC
A BC Second Mortgage typically refers to a secured loan that is subordinate to the 1st loan against the property. In real estate, a property can have multiple loans against it. The loan which is registered at the BC land titles office is called the first mortgage or first position. The mortgage registered second is called the Second Mortgage or Homes Equity Loan . Properties in Canada can have a Third or even Fourth Mortgage, but those are rarer.
Canadian Second Mortgages are also called Equity Mortgages because, if the loan goes into default, the First Mortgage gets paid off first before the Second Mortgage. Thus, Second Mortgages are riskier for lenders and generally come with a higher interest rate than first mortgages.
Often a Second Mortgage can be more cost effective than paying out your 1st mortgage and refinancing because of the payout penalties. In some cases, taking out a second mortgage and negotiating an open rate on it can be your best bet even if you have to pay a higher interest rate. Most lenders will require a lender fee when initiating a open mortgage rate. All fees and costs have to be disclosed to you prior to you signing your mortgage.
Second Mortgage Can Help Improve Credit
A Second mortgage can also be a great tool to help you repair your credit or help with cash flow. If your credit is low and your 1st mortgage is coming up for renewal in the next year or in a few months, consolidation of your debt with a second mortgage may allow your credit score to improve. By managing your debt and keeping your debt repayment in good standings you stand a good chance upon renewing your mortgage to consolidation both mortgages into on with a combined lower payment and interest rate.
Second Mortgage & HELOC
Home equity mortgage & HELOC are both 2nd second mortgages taken against your home equity. A Home Equity mortgage is a fixed rate loan most of the time while the HELOC is an adjustable rate loan. Besides, the former allows you to take the loan funds at a single payment; the HELOC offers the credit line option wherein you can get advances till you don’t exceed the available credit limit.
The purpose of these loans is different, for example, you consolidate debts with 2nd mortgage or go for home improvement but when it comes to periodic needs, it’s the credit line that you opt for HELOC. So, all you need is a basic understanding of both loans to make them work for you.
Second Mortgage Rental Property BC
Second Mortgages on rental properties are not as common as second mortgages on owner occupied homes but we still have lenders for these types of situations. You should be aware of additional costs and criteria such as (Assignment of rents) and lower LTV Loan to Value. Assignment of rents means if failure to pay your mortgage the lender can apply to the court to have the tenant pay the rent directly to them. The lending value is usually lower on Rental Properties because the added risks to the lender, but with good covenants I can still structure your application for best results.
Second Mortgage Products BC
- Low Rate Options Available Based on LTV & OAC
- Half Interest
- Pre-Paid or No payments
- Interest Only
- Inter Alia
Second Mortgage for Home Renovations
BC Second Mortgages allow Canadians inside and outside of the Fraser Valley to obtain their home renovation dreams. In the past several years Canadian homeowners have accumulated significant equity in their homes as housing prices have increased, the hottest housing market this country has witnessed since the end of the Second World War. Now that the housing market has cooled, however, Canadians are using some of the equity they have built up to finance significant upgrades to their homes through renovations.
The Canadian Mortgage and Housing Corporation tracks home renovation trends across Canada. Recent statistics from the CMHC have shown that Canadians spent close to $19.7 billion last year in the 10 major urban centers that were surveyed. Overall, 37% of the households surveyed reported that they had completed some form of home renovation in 2007. Canadians reported that the main reasons they undertook renovations were “to update, add value, or to prepare to sell their home.”
Most Canadians- about three quarters – paid for home renovations from their savings; however, 20 per cent of home renovators paid for their renovation project with a credit card or line of credit. Not surprisingly, the average amount spent on renovations paid for with credit was higher than the amount spent from savings – $13,500 versus $11,200.
Indications are that these trends will continue in 2008, as two out of five respondents in Canada’s five largest regional centers – Vancouver British Columbia, Calgary Alberta, Toronto Ontario, Montreal Quebec and Halifax Nova Scotia- indicated that they were planning on undertaking home renovations in 2008. With a cooling housing market, and house prices forecast to grow only marginally in 2008 and 2009, home renovations represent one way in which homeowners can act to build in value to their homes.
Home renovations make sense either to enhance the enjoyment of one’s home or to increase its curb appeal in an emerging buyers’ market, but homeowners using savings or, worse yet, credit cards to finance major home renovations risk depleting their assets. Far better, to arrange a second mortgage or line of credit secured against your home’s existing equity when undertaking a major home renovation project.
While savings or credit card debt can readily finance a minor renovation project such as remodeling a bathroom or painting and wall papering – two of the most popular projects according to the CMHC -when undertaking a major renovation, like building an addition or finishing a basement, it makes sense to use a second mortgage secured against existing home equity as second mortgages carry a much lower interest rate than most credit cards.
Second Mortgage for Mobile or Manufactured homes BC
Some lenders offer second mortgage or consolidation loans on manufactured homes or mobile homes, they are very hard to find this type of loan for these types of structures, but we do have some lenders so call. The difficulty is that lending institutions or unconventional lenders consider modular or manufactured homes greater risks than traditional single-family housing. Bank on paying higher interest rates on second mortgage loans for pre-fabricated or mobile housing.
To secure additional loan products on manufactured housing there may be certain requirements that need to be met or restrictions, such as:
- Homes must be located on land you own rather than in a mobile home park or rented lot
- House is your primary or secondary residence, not a rental or investment property
- The structure may need to be immobilized and on a permanent foundation base
- The unit may need to have been built after a certain year to obtain the financing
Please take this opportunity to go to Equifax and order a copy of your credit.
Top Second Mortgage Service Areas in British Columbia
Metro Vancouver Lower Mainland
- Surrey BC , Vancouver BC, Richmond BC, Burnaby BC, Coquitlam BC, Port Coquitlam BC, West Vancouver BC, North Vancouver BC, Delta BC, Langley BC,