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A second mortgage (also known as a home equity loan) is a type of loan that you can take out on a home that you already have a mortgage on, and in which your house is used as collateral.

When you take out a second mortgage, you are essentially borrowing against the portion of your home that you own by accessing the equity you have amassed in it by paying off your first mortgage over time.

For instance, if your home is worth $500,000 and you have paid off 20% of this amount so far, you have $100,000 in equity. Your bank may allow you to access a portion of this equity to use for various purposes, such as paying for home renovations or consolidating credit card debt.

There are various types of second mortgages that you can apply for in order to access your home equity. For instance, a lump sum second mortgage allows you to access a single amount of cash all at once, which you can then pay back gradually through monthly payments.

You can also get a home equity line of credit (HELOC) that allows you to draw on the loan whenever you need it, and repay the amounts you receive the same way you would pay off a credit card.

The Main Pros and Cons of Taking Out a Second Mortgage

There are a variety of situations that encourage people to consider taking out a second mortgage, as it is a common way to access a substantial amount of cash in a short amount of time. However, before you do so, you should consider the pros and cons of taking out this type of loan.

The Pros

To begin, let’s take a look at a few of the biggest pros of taking out a second mortgage, which are as follows:

1. How you use it is up to you

One of the biggest advantages of taking out a 2nd mortgage loan is the freedom to use your home equity however you please. There are many situations to which people can apply the funds from their second mortgage payout, including the following:

• Debt consolidation: A second mortgage is a fantastic way to combine multiple debts under a single loan with affordable monthly payments. If you have unsecured debts, such as credit card debt, getting a second mortgage is an especially good idea.
• Pay for a large purchase: Whether you are planning on returning to university or would like to renovate your home, getting a second mortgage will allow you to cover significant expenditures that you cannot otherwise afford.
• Pay for everyday expenses: If you are getting overwhelmed by your bills, or are faced with some sizable emergency expenses due to an accident of some type, a second mortgage can alleviate that financial stress by granting you access to the funds you need.

2. Low interest rates

Another major benefit of taking out a 2nd mortgage loan is that you can access relatively low interest rates. This is especially helpful if you are using your second mortgage to consolidate your debts, as the interest rates are much better than those for unsecured loans.

For instance, most credit card companies charge between 20% and 26% interest, but the average second mortgage loan interest rate is currently between about 5% and 12%, depending on the type of loan you get.

3. Flexible payment arrangements

Most of the time, when you take out a second mortgage, you can extend your amortization period, which is the length of time you have to pay the loan back. With this kind of flexibility, you can customize your monthly payments to align with your income.

The Cons

Now, let’s take a look at some of the most significant disadvantages of taking out a second mortgage.

4. Most of tRisk of foreclosure

One of the biggest cons of taking out a second mortgage is the risk of foreclosure. Since a second mortgage is a secured loan that uses your house as collateral, if you fail to stay on top of your second mortgage payments, your house could be in danger of foreclosure, meaning your lender will take it from you and sell it to pay off your remaining debt.

5. Strict qualification criteria

Another downfall of taking out a second mortgage is the strict qualification criteria often required in order to be approved. Most lenders have requirements pertaining to your income, credit score, and debt-to-income ratio, which you must meet to qualify. You may be up against some exceptionally high standards, especially if you are trying to secure this type of loan from a major lender.

6. Fees

There are a few different types of fees that you typically incur when you take out a second mortgage. These include appraisal fees, legal costs, title insurance, and title search expenses.

How Canadalend Can Help You With the Second Mortgage Process

If you have weighed the pros and cons of a second mortgage and have decided that the advantages outweigh the disadvantages, Canadalend can help you connect with second mortgage lenders to ensure this process goes smoothly.

Whether you want to consolidate debts, pay for an addition to your house, or put your kids through university, securing a second mortgage loan through us can make your goals a reality. Our mortgage experts are happy to guide you every step of the way. 

We have access to a variety of second mortgage lenders in Ontario. Many of these lenders do not require income or credit qualifications, which means we can help set you up with an easy and expedited loan application process. 

We understand that everyone’s financial situation is unique, which is why we do not mind tailoring our services to meet your specific needs. When you contact us, we will schedule a free personal consultation to assess your needs and match you with a suitable solution. We will go over all of your second mortgage options with you and answer any questions or concerns you may have during this process.

For more information about how we can set you up with second mortgage lenders, or to learn about the various mortgage solutions that we have to offer, call Canadalend at 1-844-586-0713 or contact us here.

Buying a home is one of the most exciting things you may ever do, and looking at homes for sale in search of one that matches your hopes and aspirations can be incredibly fun.

On the other hand, once you have to start applying for a mortgage to afford the house of your dreams, that fun tends to fade into the background and is replaced by many tedious steps that must be taken.

Unfortunately, this is where things begin to really slow down. There are a number of predictable delays once the loan application process is initiated, especially if you are dealing with a traditional lender.

One of the main factors contributing to this delay is that most traditional lenders require a substantial amount of documentation to assess your financial stability, such as a credit report and proof of your income going back years.

Such lenders also often require an official appraisal on the house you intend to buy to ensure its value aligns with the loan amount. The underwriting process that ensues, during which the lender must evaluate the risk of approving the mortgage, also takes time, especially if there are discrepancies in your financial information, such as recent changes in employment income.

How Private Mortgage Lenders Can Advance Your Home-Buying Process

Dealing with significant delays when you are trying to get approved for a mortgage and purchase a house can be extremely frustrating. It is particularly stressful when you are competing with other buyers who have also put offers in on the same house.

Although there is, unfortunately, no way to get around these delays when you are going through a traditional lender to get a mortgage loan, dealing with private mortgage lenders can make a big difference in speeding up this process. The following are some of the main ways a private mortgage lender can expedite your home-buying process:

1. Flexible lending criteria

Unlike traditional mortgage lenders who want to see extensive documentation of your finances, and are focused on credit score and whether you have a consistently  documented high income over the years, private mortgage lenders have more flexible lending criteria.

The main focus for most private home loan lenders is your equity and your ability to repay the mortgage. This is why they are generally willing to look at factors beyond your credit score or income.

Private home loan lenders can speed up the home-buying process because it often means you do not have to spend as much time collecting and arranging documents for submission. Also, you do not have to wait for those documents to be verified and considered.

The mortgage-approval process can be especially slow when dealing with a traditional lender if you have a unique financial situation such as self-employed income, or if you have a poor credit score. Thus, it often takes extra long for traditional lenders to consider the risks of underwriting your mortgage.

You may also be turned down by multiple lenders before finally finding one who will approve your mortgage, wasting more time. You may even have to wait until you can correct your credit score before getting approved, which could take years.

However, when you work with a traditional lender and boosting your credit score is not necessary for approval, getting approved for a mortgage will not be held up by this.

2. Simplified application process

In most cases, private mortgage lenders have more streamlined mortgage application processes compared to traditional banks. This is because there is much less time-consuming paperwork to complete and fewer bureaucratic hurdles to overcome. A major component of this is a reduced regulatory burden for private lenders.

While traditional banks often have to follow strict procedures to fully adhere to regulatory requirements, private lenders face much fewer restrictions, making things less complicated. With less rigid approval criteria and fewer layers of review, it is often easier for private mortgage lenders to approve mortgages faster.

3. Streamline your mortgage search

It is usually tedious and time-consuming to seek out the right mortgage for you. Doing so usually involves a seemingly endless amount of paperwork and negotiations with different lenders.

However, when you work with an independent mortgage broker, they will do much of the legwork for you, from comparing terms and mortgage rates to managing the application process. Thus, they make it more convenient for the homebuyer, while also removing unnecessary stresses.

In addition, dealing with an independent mortgage broker means working with a seasoned professional with a deep knowledge of the mortgage market and industry trends. So, if you feel overwhelmed and you have questions, your independent mortgage broker can offer expert guidance.

With their professional insights and guidance, you can make faster and more decisive decisions regarding a mortgage agreement that works for you.

How Canadalend Can Help Speed up the Home-Buying Process 

If you want to avoid multiple delays throughout the home-buying process and possibly risk losing the home you want because of these delays, Canadalend can help you access private mortgage lenders. They will expedite your home-buying process so you can quickly get the home you want.

Even if you have a unique financial situation or a poor credit score, we will help bring a mortgage approval within reach and ensure you get access to the best possible mortgage rates.

The investors we work with have more flexible lending approaches so that you can avoid having to deal with the stringent, drawn-out approval processes that most major banks would put you through.

Our team of mortgage experts can guide you through this process, answer your questions, and provide information to relieve your doubts. We are dedicated to providing 5-star service and will even set you up with an appointment for a consultation that is 100% free so that we can get you closer to finding a mortgage that suits your needs.

For more information about how we can set you up with private mortgage lenders, or to learn about our various mortgage solutions, call Canadalend at 1-844-586-0713 or contact us here.

Do you have a home with a primary mortgage that you have been paying off for some time and are looking for a way to access a significant sum of money to cover some upcoming expenses? If so, a home equity loan, also commonly referred to as a second mortgage, could be the perfect solution.

This type of loan allows you to access the equity built up in your home over time. If approved, you could receive a lump sum of cash that you could use for anything you want, such as home renovations, medical expenses, and debt consolidation. With a home equity loan, you can borrow up to 80% of the appraised value of your home, minus any outstanding debt you have.

As with a primary mortgage, if you want a home equity loan, you must apply and qualify for it. Once you receive the loan, you will need to repay this amount with either a fixed or a variable rate of interest over a set term. It will be your responsibility to simultaneously make regular payments on both your first and second mortgages.

What are the steps of a home equity loan application process?

If you have a decent amount of equity in your home, you can access a serious chunk of cash with a home equity loan. Before you receive that money, however, you must first go through a loan application process that is similar to the initial mortgage loan application you went through when you first purchased your home.

This process consists of various steps and involves your home equity loan broker doing an investigation into you and your finances to determine your eligibility for the loan and to figure out the size of the loan you qualify for. The following are some of the most common steps of the home equity loan application process:

1. Identity and proof of ownership verification

When applying for a home equity loan, one of the first steps involves verifying your identity and proving ownership of your house. In Canada, you must be 18 years old to receive a loan. You must also have citizenship or permanent residency in the country, which can be verified by providing a valid form of ID, such as your driver’s license or passport.

Since a home equity loan necessitates that you own a home, you will have to prove this by providing evidence such as the property title and/or utility bills with your name and the address of the property on them.

2. Property insurance verification

Another matter that most lenders will want to examine before approving you for a home equity loan is whether your property has sufficient property insurance. If your lender requests such verification, you can simply provide them with a copy of your home insurance policy.

Verifying that you have such insurance and that your policy is extensive enough gives lenders more peace of mind in knowing their investment will be protected if your home is damaged or destroyed.

3. Mortgage payment history verification

One more thing that your mortgage lender will likely want to verify before moving forward with your application process is that you have paid at least 25% of the property off. This is typically necessary to qualify for such a loan. You can prove that you have done this by allowing your lender to review statements of your mortgage balance.

4. A home appraisal

Once the factors mentioned above have been verified, one of the most important steps of the home equity loan application is getting your home appraised. Since it is necessary for the lender to know the current value of your home to determine the amount of money you are eligible to receive via a home equity loan, this step is a must.

In most cases, a home appraisal will involve an official home appraiser visiting your property for an hour or two to thoroughly inspect both the interior and exterior, measure the square footage, and evaluate the home’s various features before comparing your house to homes of a similar size and style that have recently sold in the area.

5. Income and employment verification

Another critical step in your application process deals with income and employment verification. In order to verify your current income and employment status, the lender will likely request recent copies of your bank statements, pay stubs, and tax returns. If there are multiple names on the deed of your home, the home equity loan broker will require such documentation from all parties.

6. A credit check

One more step that is usually part of a home equity loan application process is a credit check. Your credit score and credit history will provide a good indication of how likely you are to pay back the money they lend as agreed.

Therefore, when you apply for a home equity loan, the lender will pull your credit report and check if you have a history of making late payments or defaulting on loans. Generally, your credit score will need to be at least 620 in order for most lenders to consider approving your application.

How Canadalend Can Ease Your Home Equity Loan Application Process

The steps outlined above are followed by most traditional lenders when it comes to home equity loan applications. However, if you are looking for a home equity loan broker to help make this process quick and painless, Canadalend can help.

Unlike most major banks, we do not have a long list of different factors when considering our clients’ eligibility for a home equity loan. We do not focus on aspects such as citizenship, credit history, or even income level. The only factors that matter to us are your home’s value and your outstanding loans.

Since we do not fuss over all the details that most other lenders do, we keep the home equity loan application and approval process easy and streamlined. This way, you can unlock the equity in your home and access the funds you need much faster.

Our licensed mortgage professionals will gladly take the time to go over every aspect of the home equity loan process with you to ensure your understanding each step of the way.

In addition to working closely with you to make sure the loan is tailored to your specific situation in terms of the amortization period, interest type, and repayment plan, we will also keep things transparent by ensuring you are fully aware of any potential costs or penalties you can incur based on your loan’s terms and conditions.

For more information about why we are the best home equity loan broker in Ontario, or to learn more about how a home equity loan application works with us, call Canadalend at 1-844-586-0713 or contact us here.

When it comes to purchasing a house, unless you have enough saved up to buy the property outright, you are going to need to take out a mortgage loan to cover the difference between the amount you have available to put down and the total cost of the home.

Whether you are looking to purchase property for the first time or have gone through this process before, you may be surprised to learn that various types of lenders are available to secure this kind of loan.

When most people consider mortgage loans, they tend to think of prime or subprime lenders, such as big banks and credit unions. However, while such lenders offer better interest rates, they usually have more stringent requirements for loan approvals. These relate to matters such as your credit score and employment.

If you have the money for a down payment, but you cannot qualify for a loan from a prime or subprime lender because of their qualifying factors, it is also possible to get your mortgage through a private lender.

Private lenders can be individuals, syndicates, or corporations. They set their own terms and conditions, since they are not regulated in the same way that financial institutions are.

Securing a mortgage through a private lender is generally a short-term solution, as the mortgages that private lenders issue come with much higher interest rates and shorter terms, ranging from 3 months to 2 years.

The Advantages of a Private Mortgage Lender

Although the higher interest rates of a mortgage loan through a private lender may not be ideal, there are a number of different ways that you can benefit from going the private mortgage loan route.

This type of mortgage loan is especially well-suited for people in certain circumstances, and can prove to be advantageous for various reasons.

1. Easier approval criteria

When it comes to loan qualifying requirements, private lenders in Ontario are significantly more flexible and less strict than traditional lenders. They are much more lenient with regard to factors such as your credit score, income verification, and financial history.

If you are self-employed, have inconsistent income, or have a blemished credit record, this flexibility can be particularly beneficial to you. In general, private lenders mostly just want to see that you have sufficient equity, enough cash for payments, and a good exit strategy in place.

With a smaller list of requirements, it is easier to get your mortgage loan approved. As long as you have proof of the few things that your private lender wants to see, getting approved should not be an issue.

2. A speedy approval process

Another benefit of dealing with a private mortgage lender is the speed of the approval process. This is substantially faster than it would be if you were going through a traditional lender, like a bank.

Private lenders can approve and fund loans at a much faster pace. This is especially advantageous in competitive real estate markets where timing is crucial, as rapidly securing financing could make the difference between winning or losing a bid on a property.

Private lenders in Ontario provide quicker decision-making and faster access to funds because they operate with streamlined procedures and fewer bureaucratic hurdles. This faster approval process can be particularly valuable to borrowers who need to act swiftly, such as those who are looking to capitalize on investment opportunities.

3. A higher degree of loan term flexibility and personalization

Another advantage of choosing a private mortgage lender is gaining access to a higher degree of flexibility and personalization for your loan terms. When dealing with a private lender, you have more room to negotiate terms that align with your specific needs, such as the loan amount, repayment schedule, and interest rates.

This personalization can even extend to the structure of the loan itself, as private lenders in Ontario are often willing to tailor their offerings to accommodate unique financial circumstances or investment strategies.

For instance, a private lender may be willing to set you up with an interest-only loan, bridge loan, or other specialized financing options you would not typically get from most traditional lenders. When you have unconventional financing needs, this level of customization and flexibility can be especially advantageous.

4. A viable temporary solution

Finally, getting a loan from a private lender can be a perfectly viable temporary financing option when you have limited other options available. Whether you are facing temporary financial challenges or need short-term financing to bridge a gap until you can secure a conventional loan, private mortgages can be an ideal solution.

With a short-term loan from a private lender, you can access the necessary capital to purchase the property you want to refinance with a traditional lender once your financial situation stabilizes or improves. This prevents you from having to put off your real estate or financial goals.

Plus, taking out a loan from a private lender and paying it off in time could help improve your financial history and credit score. Showing a positive track record of paying off your debt, even if it is for just 12 months, could make the difference in getting loan approval from a prime or subprime lender once your private loan term ends.

How Canadalend Can Help You Secure a Mortgage

If you want to purchase property, but are worried about all the obstacles of applying for a loan through a traditional lender, and you want to find private lenders in Ontario to take advantage of the private loan benefits mentioned above, Canadalend can help!

We network with a large assortment of private investors and lenders who can help you secure private mortgage financing. Our team of finance experts would be happy to set you up with the best possible option on the market to ease your financial stress and bring you closer to buying the home you want.

When you work with us to secure a private mortgage loan, one of our lending specialists will help you set up an appointment for a free personal consultation. This will allow us to better advise and guide you based on your unique needs and financial situation.

For more information about how we can set you up with private lenders in Ontario, or to learn about the range of our other mortgage solutions, call Canadalend at 1-844-586-0713 or contact us here.