A second mortgage, put simply, is a loan taken on a property when there is already a mortgage. Like the first mortgage, it is secured by the value of the home. However, this value is the home’s equity, which is the difference between the value of the home minus the amount currently owed on a first mortgage. Second mortgages ranked behind the first mortgage lender and the LVR is usually up to 70%.
Private lenders can generally assist with first and second mortgage funding and private loans generally require less paperwork and documentation than banks. Second mortgages are more common where there are two loans with different lenders, unlike refinancing where you are able to borrow more money by accessing the equity in your property. Second mortgages are usually for terms up to 24 months and first mortgages can alos be for 24 month terms.
