Chances of getting second MortgageOpportunities to obtain a second mortgage
One of the first points a creditor considers is your loan histories. Creditworthiness ranges from 300 to 900. When you have a bad rating, usually below 620, you are regarded as a risky borrower. However, if you have a bad rating, usually below 620, you are regarded as a risky borrower. 2. Creditors will be reluctant to give you a first mortgage, let alone a second.
Also, if you have a record of delayed payment on previous mortgage loans along with judgements, confiscations, attachments or foreclosures, it will be very unlikely that you will be eligible for a second mortgage. If your loan record is good, but you have a bad record with that particular creditor, the endorser may be reluctant to authorize you unless you can give an acceptably good statement for your last delay.
In order to bear two mortgage, you must be able to make the payment on both. If you are applying for the second mortgage, give the banks two years W-2 form and government income taxes along with one months wage statements. Your account will be credited to the account of the issuing house. With this information, the merchant will summarize your total montly debts incl. credits, car credits and car overdrafts.
This is added to the amount paid on both the first and second mortgage. Then it will compute your overall month to month earnings. It' gonna split your debts by your earnings. Not more than 43 per cent of your earnings should go towards debts. It is the same regardless of whether your second mortgage is on the same or a new one.
In the case of collateral, the distinction between a second mortgage on the same real estate and a first mortgage on a second real estate becomes clear. So for example, if the creditor lends up to 80 per cent of the value of a real estate, you can lend $80,000 for a $100,000 real estate. When you have a first mortgage, you can lend the amount of the mortgage lending value that differs from the amount of your first mortgage.
So if a borrower goes up to 80 per cent and you have $50,000 on a $100,000 house debt, you can lend an extra $30,000 before you hit the loan-to-value ceiling. However, if you have a second $100,000 home with no other mortgage on it, you can lend $80,000 provided you fulfill the earning and lending covenants.
Whether you are eligible for a second mortgage depends on the object of the real estate. In case the real estate is used as a second or holiday home, the same provisions as for a first mortgage shall be applicable. But if the real estate is a rent, the bench will be stricter. Given that a real estate held as a financial asset represents a higher level of exposure, the creditor has a lower lending facility, usually 70 to 75 per cent.
This means that with a $100,000 capital estate, you may be able to lend $5,000 to $10,000 less than with a similar owner-occupied home.