What is a 2nd Mortgage? [mortgagehelps.blogspot.com]

What is a 2nd Mortgage? [mortgagehelps.blogspot.com]

www.notapennydown.com answers the question, how to buy a 2nd home in Vancouver with ONLY 5% down, with Vancouver Mortgage Broker Mark Fidgett Q My friend just bought a rental property in Vancouver and she bought it with only five per cent down. How did she do that when CMHC changed the rules earlier requiring 20% down? A: Although CMHC will only finance a rental property with 20 per cent down, they'll still finance a "second home" with as little as five per cent down! So what constitutes a 2nd home? One difference is, no rental income can be used to help qualify and it's also unlikely that CMHC will believe you're buying a second home for yourself just down the street, so the application really has to make sense. You may also have to sign a statutory document at your lawyer's stating that this is a second home. Imagine having access to insider secrets... call me 604-273-2002 or www.notapennydown.com As usual, make it a great day and we'll talk to you soon. Mark Fidgett, Your Vancouver Mortgage Broker For Life www.notapennydown.com 604-273-2002 PS Who's the next person you know who needs Help with their Stuff? Be sure to give me a call so we can help them get on that path!

mortgagehelps.blogspot.com How To Buy A 2nd Home in Vancouver with 5% Down with Mortgage Broker Mark Fidgett

Many homeowners have received phone calls and mail inviting them to take advantage of lower interest rates on a 2nd mortgage.  However, they may not have a clear understanding of 2nd mortgages.  After all, what is a 2nd mortgage?  Does it mean you’re buying your home all over again?  How does it work and what is it for?  A 2nd mortgage is a loan that is secured by your home and is secondary to the first mortgage on the property.

 

Some people may not even know that real estate can have more than one loan against it.  It’s rare, but some properties even have more than two loans against it.  A 2nd mortgage is deemed as such because it is secondary to the first mortgage.  The first mortgage is always the loan to get paid off first if the buyer defaults and the property is sold in foreclosure. 

 

A 2nd mortgage usually has a higher interest rate than a first mortgage because it is viewed as being a riskier venture.  It is very important to remain current on the 2nd mortgage because if you default on the 2nd mortgage, the lienholder can and will foreclose on the property, whether the buyer is making payments on the first loan or not.  If the second lienholder forecloses, the proceeds from the sale of the property will be used to pay off the first mortgage and any funds left will be used to satisfy the 2nd mortgage.

 

A second mortgage is usually determined by the amount of equity that is in the home.  Equity is the difference between the market price of the home and the balance of any lien against it.

Usually, the higher amount of equity you have in your home, the higher the amount you can borrow in the 2nd mortgage. 

 

The length of time to repay a 2nd mortgage is usually shorter than for a first mortgage.  The repayment time can range anywhere from one year to 30 years, depending on the amount borrowed and the terms of the loan.  This type of loan is normally used to consolidate bills, pay for home repair or additional construction or remodeling.  It can also be used to finance a college education, pay for a vacation, or to finance a business startup.

 

The uses of a 2nd mortgage are not limited to any one specific use.  The money is used at the discretion of the borrower.  In obtaining a 2nd mortgage, you will not be repurchasing your home.  You will be using your home as collateral for the loan.  This is why it is very important to remain current on your payments.  If you default, your home will be sold in a foreclosure sale. 

 

Used wisely, a 2nd mortgage can help you get a better hold on your finances, increase your credit rating with timely payments, and can allow you to do things you would not ordinarily have an opportunity to do.  Conduct your research into your options and determine of a 2nd mortgage is the best way to realize your goals.

Find More What is a 2nd Mortgage? Issues

Question by jenbrown73: If someone dies and they were the only one on a 2nd home mortgage, will going in default ruin spouses credit? My friend's Mom past away and she was the owner (alone) of my friend's home. Now she can't afford the mortgage and is moving. Will the father be responsible & will it effect his credit if the loan goes into default, even if he did not sign for the home? He can't afford it either, the family has huge medical bills. Best answer for If someone dies and they were the only one on a 2nd home mortgage, will going in default ruin spouses credit?:

Answer by kaceysfamily
It depends on how she took title on the property.

Answer by americanbygodd
Might not hurt thier credit but they will lose the house.

Answer by PuterPrsn
That will depend on the state. In some states, the spouse is responsible for the bills regardless. In some, who is on the note takes precedence. Time to consult an attorney, which will only cost about $ 100.

Answer by ncbound
as long as the fathers name is not on the house he will be ok

Answer by Joieanew
It is a federal law not state. Any debt incurred to either parties while married become the dual responsibility of both partys, weither a signed agreemnt is vild or not. THe dad is responsible for the morgage if it goes into default. So long as your friends parents are married. There is nothing he can do about this short of filling for bankruptcy. He must continue the payments, if it goes into default its his tail. Simil lar things happen if on parent filles for bankruptcy and the other doesn't. Then all the bills accrued in the one parents name now automatically get switched to the spouse. Its not fair but it is the way it is.

Answer by jannie
I don't know how only 1 person got the mortgage without being in both names unless they are not married. I think only person that loan is in is responsible.

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