How to qualify for your second mortgage in Mississauga.
2020-06-23 Jun 23, 2020
Now you know what a second mortgage is and how it can benefit you, but how do you qualify for one?
Take a look at these six points to find out what you may need to do in order to qualify for your 2nd mortgage.
1. Be a homeowner.
Simply being a homeowner, qualifies you for a second charge mortgage.
You don’t live in the house you own?
Then no worries, you don’t have to live in the home you own in order to qualify for a second collateral mortgage. Many folks own multiple rental properties that they do not dwell in, however, readily qualify for a 2nd mortgage.
2. Have equity in your home.
In order to take out a second loan you need to have value in your house, your second position mortgage is secured to your home. Therefore, it will have to be worth more than the mortgage itself. Talk with your mortgage advisors and discuss how much value there is in your home, this way you can determine how much equity your house has.
3. Pass an affordability check.
Are you able to afford your loan and pay it back on time? If so, then you’re on the right track to qualifying for your mortgage. If not, then this will show when you go for your affordability check, but no worries! Here are some great tips to help you pass your affordability check:
- Pay off your debts.
- Spend as little as you can.
- Don’t apply for your loan just yet.
- Pay all your bills on time.
- Have your paperwork ready.
4. Are you over the age of 18?
In order to qualify for a 2nd charge mortgage, in most jurisdictions, you may need to be over the age of 18, this maybe the same with any application such as: a personal loan or secured loan.
5. Are you employed or self-employed? We can get you approved!
Like any loan, you’ll need to show that you can pay it back. For some of you, you may be self-employed and are wondering if this will affect how much you qualify for your mortgage loan.
If you’re self-employed, the rules still apply to you and the only difference is you’ll have to provide extra details of your earnings and how secure your earnings are to be approved for a self employed mortgage.
6. Have a good credit score. (bad credit score? we can still have you approved!)
Are you struggling to pay off your first mortgage? If so, it may make sense for you to consider getting a second registered mortgage on your property. Most of the lenders in our network can assist with a home equity loan that will allow for you to get caught up and payoff your first mortgage payments, and in some cases, arrange for the loan to be pre-paid (speak with our mortgage professionals to explore this option).
So, having no income of a poor credit score should not impede you from applying for or qualifying for a loan on your home. Many folks use this form of a second loan as a bridge to allow for them to regain their financial footing. Ideally, this should be a short-term strategy.
These six points are significant considerations to be aware of when looking at your application for a second loan, so make sure to speak candidly about your situation with our mortgage broker when you apply.
Now you know what to do, why don’t you get started?
For more information, reach out to us via our contact information below:
Toronto Second Mortgage
Broker 1880 O’Connor Dr
North York,
ON M4A 1W9
416-895-6074
victor@bestrefinance.ca
