Category Archives for Private Second Mortgage
Private Second Mortgage Popularity
“Private Second Mortgages Are The Most Popular Form Of Private Mortgage Lending For Both Borrowers and Lenders/Investors”
A private second mortgage on residential or commercial property is by far the most common type of private mortgage financing.
There are reasons for this from both the borrower’s perspective and the lender’s perspective.
Borrowers utilize private 2nd mortgages to consolidate debt while leaving their existing first mortgage in tact. A long term first mortgage is likely going to carry a significantly lower rate than a private first mortgage, so if the first mortgage can be left alone, a private second can be an excellent source of incremental cash flow.
With respect to debt consolidation, even at higher than bank rates, a private second can allow the borrower to consolidate short term debt such as credit card balances and still end up with a lower interest rate. And because private mortgage debt servicing requirements are typically interest only, a debt consolidation loan can provide considerable relief to cash flow as well.
Another key benefit to securing a private second mortgage is the speed in which it can be put into place. While the average private 2nd will be placed in 5 to 10 business days, it is possible to go from application to funding in 2 to 5 business days as well.
From the lender or investor point of view, private seconds are ideal for building a portfolio of mortgages and spreading their risk across a number of mortgages. This is due to the fact that private seconds are typically for amounts under $200,000, greatly limiting the lender risk on any one loan.
Because of the second mortgage position, there is greater risk to a mortgage lender, so private second rates will also be higher than first mortgage rates, which is also attractive for many lenders that are looking for a certain rate of return on their money.
Lenders will typically charge both an interest rate and a lender fee on closing which collectively makes up their total rate of return on any one deal.
Most private seconds will provide a term of one year and some will provide an option for term renewal, but that is not typical among private lending.
In general, the stronger the real estate market in any area, the more private money will be available for second mortgages as lenders will have to approve funding on higher loan to value ratios where the related risk can only be managed by the strength of the resale market for similar property types.
If you require a private second mortgage on a residential or commercial property, I suggest that you give me a call I can quickly assess your situation and immediately provide private 2nd funding options for your consideration.
Click Here To Speak With Toronto Private Mortgage Broker Joe Walsh
Ontario Private Second Mortgage
“Ontario Private Second Mortgage Financing Can Be A Great Short Term Financing Option”
Ontario private second mortgage financing options can be one of the best short term funding options you have available to you.
I say short term in that almost all Ontario private second mortgages that we work with are for a period of one year.
So if you have equity in real estate and are in short term cash crunch, or are looking to paying down higher sources of credit such as credit cards, then a private second may be something that fits your requirements.
One of the main reasons that individuals consider private 2nd mortgages in the first place is because they have a good first mortgage in place with a good rate and they don’t want to disturb it through a mortgage refinancing process. This is especially true in situations where credit is bad and would not support a refinancing of the existing first at comparable rates.
While a private second is going to come at a higher rate than a bank first mortgage, the amount is typically going to be considerably smaller, so the weighted average cost of financing can still be quite reasonable, especially if you are using the mortgage funds secured to pay down credit cards or other forms of high interest rate debt.
In the majority of cases an Ontario private second mortgage can be put into place within ten to fifteen business days from the time of application to the time of funding. That being said, it is possible to complete the entire process in two to five business days provided that everything is in order.
Our private lending network is looking for private second mortgage opportunities that do not exceed 85% loan to value on residential property and 75% loan to value on commercial property.
The process for assessing funding starts with a phone call and in many cases we can get a verbal commitment from a lender in a matter of hours.
If you are in need of an Ontario private second mortgage, please give me a call so I can quickly assess your requirements and provide private second mortgage options for your immediate consideration.
Click Here To Speak With Toronto Private Mortgage Lender Joe Walsh
Toronto Private Second Mortgage
“We Provide Toronto Private Second Mortgages On Residential And Commercial Property”
A Toronto private second mortgage can be secured in fairly short order from one of our private lending investors that have a focus on the Toronto market.
Private 2nd mortgage financing requests are the most common form of private mortgage financing we see as they relate to many different applications including debt consolidation, construction financing, equity take out, bridge financing, and bad credit mortgage financing.
For most private second mortgage applications, we can provide funding options in a matter of hours with a formal proposal for financing provided in writing within 24 to 48 hours.
Most of our Toronto private second mortgage placements get completed in a two week period from the time of application to funding. If you need something in place faster than two weeks, it is possible to get a private 2nd in place in two to five business days, provided that you have everything in order and your lawyer is able to act quickly on your behalf to complete the transaction.
The key to any Toronto private second mortgage request is the equity that exists in the property.
The majority of private lenders that will fund private seconds in Toronto will go up to a total loan to value of 85% with the odd one going as high as 90% loan to value.
Because Toronto is such a strong real estate market, there could be a number of private lenders that would be interested in any particular deal.
This level of competition will reward those with good properties and lower loan to value ratios with lower interest rates and better mortgage terms overall.
While not typically critical to any private mortgage deal, the credit profile of the applicant may still be reviewed by a private lender to get a better indication of whether or not the potential borrower meets their financial obligations on a regular basis.
If your credit is very bad and you have a near term credit history that shows late payments, missed payments, and/or debt write offs or write downs, the cost of financing will likely go up as the application will fall to only the private lenders that work with poor repayment histories.
The best way to find out what your Toronto private second mortgage options are is to give me a call so we can go over your requirements on the phone together and discuss different solutions that may be available to you in the market.
As I mentioned earlier, we can typically tell right away if we can help you or not, and if we can’t, we’ll also tell you as soon as possible so that neither of our time is being wasted.
2nd Mortgage
“A 2nd Mortgage On Residential Or Commercial Property Is The Most Common Form Of
Private Mortgage Financing”
A 2nd mortgage on a home, commercial, or industrial property is a very common and simple way to tap into the equity in real estate without disrupting the first mortgage that is already in place.
In the private mortgage lending world, most private mortgage loans are secured by a mortgage in second position.
Because private money loans are short term financing obligations, many times it makes more sense to get a 2nd mortgage in place quickly from a private lender then having to take the time to work through a first mortgage refinancing scenario.
Outside of the speed of private lending, there are a couple of additional reasons why 2nd mortgages from a private money lender can be your lending vehicle of choice.
First of all, for those with bad credit that require additional capital, you may not be able to refinance a new first with an institutional lender and if the first mortgage is in good standing with a good interest rate, you’re likely better off leaving the first alone anyway and maintaining the low monthly payment you’re already enjoying.
A private 2nd mortgage is approved based primarily on the equity in the property, so for individuals with strained or damaged credit and an up to date first mortgage in place, this can be the best option to generate incremental funds.
The second additional reason for considering a second mortgage is that the repayment penalty to refinance the first mortgage is going to be significant and would amount to basically throwing money away. In these situations, a second mortgage from an institutional or private mortgage lender may be more cost effective in the long run.
The majority of private lenders prefer second mortgages under $100,000 and under 90% loan to value on the property so if your need fits with these criteria, then there likely going to be several financing options to choose from.
That being said, much larger private second mortgages are also possible, but the number of lenders in any given area that will be interested in the financing opportunity will be lower.
If you’re in need of a private 2nd mortgage on a residential, commercial, or industrial property, I suggest that you give me a call so we can quickly go over your requirements together and discuss potential options available to you.