When to Take Out a Second or Third Mortgage

There are many reasons to take out a 2nd or 3rd mortgage on an existing home. And when it comes to the low mortgage rates your InTrend Mortgage agent can negotiate on your behalf, in many cases it just makes sense.

Ask us about refinancing for:

• Consolidating debts
• Renovations and home improvements
• Starting a business
• Buying investment properties
• Freeing up cash for your business
• Children’s education
• Weddings
• Post-divorce equity payouts
• Paying overdue taxes
• Paying off bad debt or mortgage arrears
• Bringing mortgage arrears up to date
• Halting a power of sale

Canada’s best mortgage prepayment options

Even though rates for 2nd and 3rd mortgages are generally higher than standard mortgage rates, InTrend Mortgage can help you refinance with Canada’s best prepayment options.

Understanding 2nd and 3rd mortgages

Private 2nd and 3rd mortgages are one of Canada’s most common forms of private mortgage financing. This is because they offer a low interest way to consolidate debt, borrow money, or pay off loans – while leaving a long term first mortgage in place. This is beneficial, because first mortgages usually have a lower interest rate, making a 2nd or 3rd mortgage a good source of cash flow.

Another great benefit to 2nd and 3rd mortgages is how fast they can be put in place. Often these can be approved and begin generating cash within 2 to 5 business days.

Improving cash flow

2nd and 3rd mortgages can also help homeowners free up monthly cash flow. Even if the rates are higher than posted bank rates, refinancing allows for debt consolidation with far less interest than credit cards. What’s more, interest only debt servicing may also be available, freeing up usable cash for monthly expenses.

2nd and 3rd mortgage cost

As mentioned above, interest rates for 2nd and 3rd mortgages are typically higher than those for first mortgages. This can range from 2 points above posted bank rates, to 15% and up, depending on terms. Lenders base approval on LTV (loan-to-value), your property’s location and the risk level of the loan.

Once approved, most lenders may charge anywhere from 10-15% on an 80-90% LTV 2nd mortgage.

Keep in mind too, that with a 2nd or 3rd mortgage, you may also need to pay lender fees, broker fees, legal fees and for a property appraisal.

Call us today at 905-780-8988 if you’re considering applying for a second or third mortgage.