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 Capital 360 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, Capital 360 Mortgage can help you refinance with Canada’s best prepayment options.
Understanding private mortgages
Private 2nd and 3rd mortgages are one of Canada’s most common forms of private mortgage financing. This is because they offer a strategy 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 funded within days.
Improving cash flow
Private 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.
Private mortgage costs
As mentioned above, interest rates for private mortgages are typically higher than those for first mortgages. Lenders base approval on LTV (loan-to-value), your property’s location and the risk level of the loan.
Other associated costs with Private mortgages would be broker, lender fees, legal fees, appraisal fees and miscellaneous administrative fees.