If you’re a Canadian homeowner, you may have thought about using a second mortgage lender. But what is a second mortgage? It’s a type of loan that is secured by your home, similar to a first mortgage provided by a traditional bank.
If you need to access some additional equity in your home but don’t want to make any changes to your existing first mortgage due to an excellent interest rate or large penalty for breaking your current term, then a second mortgage may be the option for you.
With this option your existing mortgage will remain unchanged and registered in first position on title. A new mortgage lender will then lend additional funds and register a second mortgage on title behind your current lender. As the lender in first position is always paid out first, the lender in second position as assuming more risk which in most situations equates to an increased mortgage rate. Your experienced mortgage expert will assist you with determining if acquiring a second mortgage is more beneficial financially than refinancing your existing mortgage.
Contact us today if you have any questions, we would love to speak with you.
