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2nd Mortgage Solutions

What is a second mortgage?

A second mortgage AKA as a home equity loan, is a standard mortgage charge against a property, very much in the same manner a “regular” mortgage is. You are using your home or property as collateral and a loan is being registered against in, in second priority position.

Banks and Credit unions are offering less products than ever in this second mortgage space. The ones that do, many are switching to a HELOC (Home Equity Line Of Credit) products which are tough to qualify for after the recent mortgage regulation changes.

A 2nd mortgage on the other hand is almost always approved off the equity position. If you have strong equity or are in a good loan to value place (loan amount vs home value) then lenders are mostly concerned about that and the quality of the property or asset. The lower the risk factor – loan vs value – the easier it is to be approved.

  • Second mortgages are most commonly used as a tool for debt consolidation – using it as a way to lower monthly payments by also increasing your credit score by paying down trade lines. In addition you may also use a second mortgage for
    • Property Tax Arrears
    • Mortgage Arrears on 1st
    • Rebuilding Credit
    • Home improvements/renovations
    • Paying out Proposals
    • And much more.

In other words, because lenders place few restrictions on equity based financing, there are almost no restrictions on what you can use your loan for – as long as it makes sense, is within your budget and you have the equity there should be options available to you.

Can I Get a Second Mortgage in Canada with Bad Credit?

Getting a second mortgage with poor credit is a very common thing. As we’ve noted earlier, many times they can be used to drastically increase your credit score and profile.

Second mortgage lenders – especially those working with clients with damaged or lower scores work almost exclusively with select mortgage brokers who specialize in the space – Such as Plan B Mortgage Services. These relationships can help you to receive the best overall service and pricing.

To get more information on how we can assist you, please call us at 604-464-0960 or underwriting@planbmortgage.ca