At LoanBox.ca, we are now arranging Second and Private Mortgage financing on residential properties across Canada.  Generally with Second or Private Mortgages, our lenders will lend up to a total maximum of 90% of the value of the home, this will include the first mortgage.  For example if a home is worth $100,000 and there is already a first mortgage at $60,000, the maximum additional equity that can be used will be $30,000.  There are several reasons why a Second or Private Mortgage is preferred by most borrowers in Canada.

Here are a few scenarios:

1. 1st Mortgage is locked in a term at either an excellent rate or a high penalty will be charged to break the mortgage before maturity.  In this case, if there is additional equity available in the home and if it doesn’t make sense to break the 1st mortgage, the second mortgage option might be a good one if you need to access your home equity.

2. If you have been turned down by your bank for a refinance because of bad credit or lack of income, our lenders may offer financing on a second mortgage basis.

3. If you are purchasing a home and the maximum mortgage amount that the first lender will provide is not enough due to credit, income or property qualifications, a second or private mortgage can be used to “top-up” the additional mortgage financing needed to complete the purchase transaction.

4. If you are refinancing to consolidate debt, purchase investment, renovate your home or any other reason that you would need to access your home equity, a second or private mortgage may also be a good alternative.

Second mortgages are generally funded by private or non institutional mortgage lenders.  Generally rates for these types of mortgages are significantly higher due to risk of the lender not being able to recover funds in the event of default.  Rates for second and private mortgages are generally anywhere between 6 and 15% for residential mortgages in Canada.  In most cases, credit and income are generally forgiven for second mortgages as they are approved on an equity basis.  Lenders and brokers involved may charge additional fees for arranging these types of mortgages.

For more information on Second or Private Mortgage financing in Vancouver, BC or across Canada, please Contact Us or Apply Now.