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Second Mortgage Basics |
Written by Melanie C
Thursday, 26 June 2008
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A second mortgage is often used when a real estate investor cannot get 100% finance for his purchase. It may be that he does not wish to use his own funds to supply the 5%-20% necessary for the deposit, or perhaps he does not have that amount. By offering a second mortgage to another party, he can access the needed funds. To find someone willing to give you a second mortgage, you can ring solicitors, as they frequently offer second mortgages - either on their own behalf or that of their clients. Finance brokers may also agree to give you a second mortgage, or the vendor of the property might be willing to do so. While the person who offers a second mortgage is not in reality likely to get much out of it should you default, they agree because the interest rates are higher than on a first mortgage. This compensates them for that extra risk. And if you don't want to pay such high interest you can refinance as soon as you have the money and pay them out. By getting a second mortgage you will not only avoid injecting your own cash into the deal, but also avoid paying lenders mortgage insurance (LMI) on your first mortgage, which is a good save. Article Source: http://www.ArticleBlast.com |
About The Author:
Looking into homes Perth? Visit the Saville Australia website (http://www.savilleaustralia.com.au) for more information on Perth real estate.
Looking into homes Perth? Visit the Saville Australia website (http://www.savilleaustralia.com.au) for more information on Perth real estate.
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