Interest Rate On A Second Mortgage
The interest rates on Second Mortgages are normally advanced than those of First Mortgages. This is mainly due to the enlarged possibility for the Second Mortgage Lender.
Basically, in the occurrence of evasion, the Second Mortgage owner would only improve his finances from the earnings subsequent to the First Mortgage was fulfilled. In addition to the First Mortgage any Municipal Taxes due, Legal Fees Payable and all Processing costs would have to be paid as well, before the Second Mortgage lender would take delivery of any funds to persuade the Second Mortgage. In some cases of failure to pay the Second Mortgage lender may choose to presume the First Mortgage to guard his interest in the property. This will be not only lengthy but expensive for the Second Mortgage lender.
The Interest rates determined by both Institutional and Private Lenders on Second Mortgages will be based on many underwriting criteria.
• Credit History of the applicant
• Income
• Location, Type and Condition of Property
• Debts that may remain after the Second Mortgage is in place
• The total Loan to Value (LTV): the total amount borrowed as a percentage of the value of the home
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