In Welland, Ontario, Canada just as well as most parts of the world, a 3rd mortgage can be described as a mortgage that is subordinate to the existing first and second mortgage liens. In the event a borrower defaults on their mortgage payments, the first and second mortgage lenders will be given preference (respectively) when the property or home has to be sold off to recover the loan balance amount. For this reason, it has become quite difficult and very rare to find home equity lenders that offer third mortgages these days. They were much more common during the late 20th century; that is, the seventies and the eighties. Few, however still offer Welland 3rd mortgages. Third mortgage loan agreements are very difficult to secure nowadays; however there are a few private money lenders that continue to offer this type of alternative financing.
This is an agreement that is recognized and controlled by the authorities. When you decide to apply for a Welland 3rd mortgage loan, as a borrower, you will need to make sure that your agreement is written and that it clarifies certain areas – this way, there will be fewer surprises and risks.
The borrower needs to be aware of the following;
Proper documentation of the agreement is also necessary. It protects both the borrower and the lender.
Most people have a negative attitude towards third mortgages. They seem to think that they are risky, they are difficult to find, and that if a borrower does find a lender willing to advance a third mortgage to them, then the interest rates charged on them will be unrealistically high. Granted, third mortgages are hard to find and some private lenders who offer them, do so at extremely high-interest rates, but there are still a few who can arrange loan offers that suit your needs. Contrary to popular beliefs, third mortgages actually have benefits and these are discussed below;
Lenders offering third mortgage loans often provide other services like Debt Consolidation to help the borrowers manage their debts more effectively.
It goes without saying that third mortgages offer the borrower refinancing options. These funds can be put to better use such as renovating the house and increasing its market value – something that works in favor of both the lender and the borrower.
Some lenders will also have the option of arranging for interest only payments with the borrower. Interest only payments are much lower. This is usually common in long-term loans, and it gives the borrower some room to adjust and adopt for a few years before starting to make more monthly payments.