Second Mortgage Requirementsadmin
Planning to get a second mortgage? Find out the requirements to make the process faster!
Second mortgages are just like any other mortgage plan and they can be obtained if you have the right documents ready to go and you meet all the criteria! These are essentially the second loan you are taking out on your property.
Why do people take a second mortgage?
Second mortgages are taken by people to have extra funding. It serves as a great way to take money out of your home and use it for multiple purposes. In Ontario, people use it for renovations and to make additions to their homes. It also serves as an emergency fund and can be used in times of dire need. With second mortgages, you can even consolidate your debt and make your income secure.
What are the requirements for second mortgages?
When a lender looks at your application for a second mortgage, they look for the following things in particular:
- Credit score and history
- Property for collateral
Second mortgages are taken against the equity present in one’s home. This means that the first priority for a lender would be to ensure that you have the equity required in your home to borrow the amount you require. They will usually send an appraiser to determine the current value and they will also require an account of your previous mortgage and how much you have already paid.
Just like any other mortgage application and policy, credit score and history form a major determinant for second mortgages as well. It is important for you to have even better history and score to apply for a second mortgage as your pose a bigger risk this time. If you have made proper payments on your first mortgage, then you should be good. But if you are suffering from bad credit history, you can contact us to see how they can help!
Second mortgages are secured loans. The lender will need to confirm that the house you are borrowing against is definitely yours. You will need to provide the lender with documented proof that the house is yours. This will help the lender quicken the process and make the loan final.
Income is also very important. Your debt should not exceed your income. You need to have some kind of savings to maintain daily expenses. Lenders will not give you a second mortgage if you do not have enough income. You need to provide them with income statements, tax statements as well as pay stubs.