Toronto Second Mortgages

Toronto Second Mortgages 

A second mortgage is a loan or charge secured against a property which takes second position behind a first mortgage holder. The second mortgage holder could be the same as the first mortgage holder, but typically, this is not the case.

Properties can have multiple loans or liens against it. A loan or charge registered with the province first is called the first mortgage against the property. The loan registered second is called the second mortgage or charge. A property can have a third or even fourth mortgage, but these kinds of mortgages are quite rare.

Toronto second mortgages are subordinate mortgages because, if the home owner fails to pay his or her mortgage and the loan goes into default, the first mortgage holder gets paid first before the second mortgage holder. Thus, second mortgages are much more risky for lenders. Consequently, they come at a much higher interest rate than first mortgages.

A second mortgage is essentially a home equity loan. Generally, a ‘mortgage’ is the legal term to describe the legal lien on the property, rather than the debt itself.

The length of term for a Toronto second mortgage can vary. Terms can be as long as 30 years or as short as one year. The amortization can be 5, 10, 15 years or more. It could also be an interest only loan as well which provides for the however repayment may be required in as little as 1 year depending on the loan structure.

The benefits of a Second Mortgage

Oftentimes, a second mortgage can be helpful to help avoid Power of Sale. If, for a number of reasons a home owner defaults on their mortgage a second mortgage can be helpful to catch up arrears and get the home owner back on their feet. Here are some other reasons:

  • To consolidate high interest debts such as credit cards
  • To pay for unexpected expenses and bills
  • To release equity to do home renovations
  • To pay out a bankruptcy or Consumer Proposal
  • To help repair credit reports
  • To invest in stocks mutual funds or business investments
  • To pay for secondary or higher education or children’s education such as college or university

Advantages of a second mortgage in Toronto

  • It is always better to try to secure a new second mortgage if you want to increase your debt because the rates are so much lower than a second mortgage or unsecured loan. However, if you currently hold a favorably low rate first mortgage and do not want to discharge due to penalties, fees, etc. a second mortggae might be a better option. (Ask your Expert Mortgage Broker to do the calculations for you.)
  • Second mortgages can also be arranged with greater ease due to the amount of lenders available both institutionally and privately. Oftentimes, they are only interested in the value of the property, not the credit history or employment income.
  • Most lenders of second mortgages are prepared to allow interest only payments and 1 year terms
  • Up to 90% of Home Value can be used depending on the lender to arrange a 2nd mortgage

WHAT PEOPLE ARE SAYING…

  • “I can’t say enough how great your company has been. Matthew, thank you so much for making all of this process so easy for us. Our bank would not help us and you were amazing. Your company kept us informed every step of the way, and not once were we made to feel inferior like our bank did. The lawyers you set us up with were also awesome. I will highly recommend your company to anyone looking for mortgages. Thank you so much for getting creditors off or back and setting us on the right track. You guys are all amazing. I’m also so impressed that you came to us do to everything.”

    KKP, HAMILTON
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    M.D, Mississauga, ON
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    S.E. Orono, ON
  • “My pig farm always made good profit but last year was brutal for the whole industry. I fell behind on my mortgage. I showed FCC that my loss was just a temporary blip and asked them to give me some leeway but they started a foreclosure anyway. Thanks for getting me that private loan to buy me some time until I’m profitable again.”

    K.O., Hawkesbury, ON
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  • “We were 6 months behind on our mortgage and the Sheriff was coming in 5 days to lock us out of our home. Every other mortgage broker said NO! I can’t believe you were able to get us a second mortgage that fast. You saved our home and I will refer everyone I know to you.”

    C.C., Oshawa, ON
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    C.R., New Dundee, ON
  • “Every time I’d walk into a bank and say the word ‘farm’ the suit on the other side of the desk would look at me like I was from another planet! They had one agricultural ‘specialist’ for the area that was not much better. Then I went to 4 mortgage brokers before I stumbled on your company. Your rates were lower than the bank.”

    M.D., Bradford, ON
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    R.Q., Woodville, ON
  • “Once again, a big thank you for arranging our new mortgage and being able to arrange for additional funds on closing. Matthew has worked hard for me over the last few years… I have a very high level of trust in Matthew and Expert Mortgage, and will surely recommend you to anyone I know who is in need. Thank You.”

    M.Z. Brantford, ON