Taking Out a Second Mortgage with the Help of Your Mortgage Broker in Ontario
By : Mits Kantaria
If you are already paying a mortgage on your home, you have the option to take out a second mortgage on the property. For banks and private lenders in Ontario, second mortgages carry risk because they’re in the second position on the title of the property. If a borrower defaults, the first lender always has priority for repayments. Because of this, second mortgages with banks and private lenders in Ontario carry higher rates. With the help of a mortgage broker in Ontario, you can ensure that you get the best rate possible.
Why Would You Consider a Second Mortgage with Banks or Private Lenders in Ontario?
Many homeowners take on second mortgages with banks and private lenders in Ontario for the purpose of debt consolidation. Money lenders attach higher rates to second mortgages, but these are still typically much lower than the rates on unsecured debt like personal loans and credit cards.
Second mortgages from banks and private lenders in Ontario can help homeowners to reduce total debt load and improve their credit scores. It’s worth considering a second mortgage in some scenarios.
A Second Mortgage in Second Position
To qualify for a second mortgage in second position behind your existing mortgage, lenders in Ontario will consider a few key areas.
- The equity that you have in your home will be used to determine the risk of the second mortgage and how much you can borrow.
- You will need a dependable source of income to support repayments.
- You will have a higher chance of approval and lower rates with a good credit score. If your credit needs rehabilitation, your broker can help you with some simple strategies.
- Assets and property that you own may be considered as security for a second mortgage in second position.
A Home Equity Line of Credit is a Popular Type of Second Mortgage
If you need funds for home repairs, renovations, or debt consolidation, you can leverage the equity that you have in your home to create a home equity line of credit (HELOC). Your mortgage broker in Ontario can help you to find the right lender for this type of finance product.
A home equity line of credit can even be combined with a fixed-term mortgage. The credit limit is often as high as 65% of your home purchase price or rated market value. To sign for this type of home equity line of credit, you will either need a 20% down payment or 20% equity in your home at the time of applying.
If you are financing a new home with a combined mortgage and home equity line of credit, private lenders in Ontario may specify a down payment above 20%.
The best way to secure a home equity line of credit with conditions that work for you is to apply through your mortgage broker in Ontario. Brokers are able to engage with the lending market, giving you access to money lenders that don’t engage directly with consumers. The options for home equity line of credit financing are broader when you go through a broker.
The Advantages of Choosing a Mortgage Broker in Ontario
Whether considering a home equity line of credit or any other type of standard or second mortgage product, working directly with a mortgage broker in Ontario has advantages.
- Your broker is your advocate working towards your long-term financial goals.
- You’ll gain access to a large lending network with more options than just the big banks and mainstream lenders.
- Brokers have relationships with private lenders in Ontario that don’t engage directly with consumers.
- You’ll only need to supply one set of documentation.
- You’ll authorize a single credit check for all applications.
- A mortgage broker in Ontario can explain the second mortgage market in detail and will help you to find the right product for your unique needs.
- Brokers have strong professional networks and can refer you to realtors, accountants, and other financial professionals for any related services that you need.
Brokers don’t work for lending companies and banks. They work for you and are invested in getting the best possible mortgage with rates that you can afford. If you want the best rates for a second mortgage or home equity line of credit, an experienced mortgage broker in Ontario will be essential.
Mortgage Capital Investment is a licensed mortgage broker in Ontario ready to help you with your second mortgage. Leverage your home equity and work towards your financial freedom and security for a more comfortable future.
Lowest Residential Mortgage Rates in Canada*
|Term||OUR RATE||Bank Rate|
|3 Year Fixed/ 25 yrs||4.69%||4.99%|
|3 Year Variable/ 25 yrs||4.35% Promo||4.96%|
|5 Year Fixed/ 25 yrs||4.65% Promo||4.89%|
|5 Year Variable/ 25 yrs||4.45% Promo||5.09%|
|5 Year Fixed/ 30 yrs||5.34% Promo||5.69%|
|5 Year Variable/30y||4.40%||4.70%|
Updated: Septembrie 13, 2022
* Current promotion rates may provide an additional 0.05% discount or may be anytime discontinued at the Lender discretion . Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.
LOWEST REGULAR RATES IN CANADA* * Current promotion rates may provide an additional 0.10% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.