A private second mortgage, in terms of pure numbers of mortgages registered each year in Ontario, occupy the number one position for private mortgage financing. Taking it one step further, private second mortgages on residential properties are likely 80%+ of all private seconds issued each year.
The reasons for this are as follows.
First, the amount of financing is typically smaller than a first mortgage so the lender exposure is lower making it more popular among lenders to provide. Second, most private second mortgages are for debt consolidation. In credit stressed situations, the borrowers may not be able to easily refinance the first mortgage into a larger mortgage to cover other debts without paying a higher interest rate or incur significant prepayment penalties. So even though the private second mortgage carries a higher level of interest, the weighted average cost of refinancing is still lower than if a new first mortgage was taken out.
Third, residential properties have a stronger and more fluid resale market on average than the commercial property market, so if a mortgage holder falls into default, there is still very little risk that the second mortgage holder will incur a loss via a foreclosure action. So even though the borrowers may be in a distressed credit situation, the lending opportunity for the lender is still very strong because of the strength of the underlying security.
Depending on the area, size of loan required, and subject property, a private second mortgage will typically range in interest rate from 10% to 14% with some amount of lender fee due on closing as well.
The best way to locate and secure a private second mortgage on a piece of property is to work with a mortgage broker who has direct access to private lenders and regularly places private second mortgages for their customers. While some private lenders have their own retail side of the business, many do not and rely on the mortgage broker network instead to locate lending opportunities. However, not all mortgage brokers have direct lender access, with most working through other mortgage brokers with more direct connections.
If you have a private second mortgage financing requirement, I suggest that you give me a call so I can quickly assess your situation and immediately provide you with private mortgage financing options for your consideration.
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel
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My email is all lower case not sure it went in that way. Looking for so advice about second mortgage financing to clear up Debt situation.
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