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.