Getting a Second Mortgage in Ontario
A second mortgage typically refers to a secured loan (or mortgage) that is subordinate to another loan against the same property.
In real estate, a property can have multiple loans or liens against it. The loan which is registered with county or city registry first is called the first mortgage or first position trust deed.
The lien registered second is called the second mortgage. A property can have a third or even fourth mortgage, but those are rarer.
Why would you risk your home with a second mortgage? These types of loans are appropriate for times when you need a lot of money. You may not have an unlimited credit and finding cash just lying around can be cumbersome.
Is there a lot of equity or value in a home? Yes there is! By borrowing against your home borrowers get bigger loans and a second mortgage may allow for bigger loans because the lender consider loans against the home to be safer.
Second mortgages are called subordinate because, if the loan goes into default, the first mortgage gets paid off first before the second mortgage. Thus, second mortgages are riskier for lenders and generally come with a higher interest rate than first mortgages.
At MortgageBrokersToday.com, our name says everything. We specialize in second mortgage transactions. We strive to provide every one of our clients with the best second mortgage approvals across Ontario.
In most cases, a second mortgage takes the form of a home equity loan and the two are synonymous, from a financial standpoint. The difference in terminology is that a mortgage traditionally refers to the legal lien instrument, rather than the debt itself.
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