Getting a Second Mortgage
Canada’s banks have a long and arduous
approval process for loans and mortgages. If you are a homeowner with
less-than-perfect credit history, it’s likely that your application for a
second mortgage will be rejected. But sometimes getting a second mortgage makes great
economic sense. If you have a large amount of credit card debt, for example,
paying it down with a loan that has a lower interest rate will save you money
and lower your minimum payments. Or, if you want to sell your home, getting a second mortgage to access funds will help you renovate or make home
repairs.
Private Lenders
Fortunately, the financial landscape in
Canada also includes private lenders. These entities pool money from individuals
and groups like Mortgage Investment Corporations and work with licensed private
mortgage brokers to provide short term loans to clients. These lenders tend to
focus on the property clients bring to the table rather than any flaws in their
credit history.
A private mortgage broker can work with you
to guide you through the process. Private lenders tend to make decisions
quickly; some even offer a 24-hour approval process! Most loans are ready to
use within a couple of weeks.
Getting a second mortgage can make a great deal of
sense for some clients. If you need funds, consider using the equity in your
home as collateral and work with a mortgage professional to explore your
options.