October 6, 2023 nkad3

The Second Mortgage Process

Urgent second mortgages are a very common request, especially in markets with growing home appreciation and increasing household debt. And 2023 is no exception to this as more home buyer’s are starting to feel the pinch from increasing rates. Though we’re hopeful, 2024 is not expected to significantly improve. Data reports that consumer household debt is rising to levels not seen before, which means that more homeowners are relying more on credit. But unsecured credit is expensive!… As it always has been.

Reasons for needing a second mortgage are endless and if used correctly, they can help achieve many different goals which can be outlined in some of our previous blogs. Among questions surrounding the specifics of the mortgage itself (rates, terms, standard conditions, etc.), we’re frequently asked what the second mortgage process is like, as applicants tend to worry as to whether they’ll qualify given their recent denial from their home branch. This blog is catered to the second mortgage process more so than the typical terms and conditions of the mortgage.

Despite the urgency often involved with second mortgages, the process  is (or can be) a quick and painless one. Unlike your traditional forms of financing (i.e. banks, alternative or B lenders), second mortgage lenders often require only basic documents to get started and can be funded (money in hand) in as little as 24-48 hours for rushed deals, or 4-5 business days at a much more relaxed pace.

If we break the second mortgage process into 4 identifiable steps, it will resemble the standard mortgage process that you’re likely already familiar with but would happen much quicker and with far less requests. The urgent second mortgage process could be outlined as such:

  1. Initial Consultation (15 – 20 minutes phone call):

Discuss with your mortgage broker your request (loan size), short and long terms goals for the use of the second mortgage and other important details pertaining to your existing first mortgage/finances

  1. Provide Basic Documentation (15 – 30 minutes):

Provide basic documents via email such as – mortgage application, mortgage statement, property tax bill and valid home insurance policy. Sometimes, but less frequent, additional documents might be needed.

  1. Meeting with us, your broker! (30 minutes virtual meeting):

This usually can take place within 24 hours of providing the application. We’ll discuss all details of your second mortgage financing and this step is the most important part of the second mortgage process. This is where we’ll fine tune the details for you (mortgage size, interest rate, closing costs, timeline, etc.)

  1. Sign with the Lawyer (30-45 minutes in person meeting)

Since this is a mortgage, it must be legally registered to the property as such. Prior to receiving the funds, you’ll need to meet with the lawyer to sign the second mortgage closing package. Most meetings must happen in person, but if you have a well established rapport with your lawyer, they might be able to accommodate a virtual signing.

We understand that at first glance, this might seem like an overly simplified second mortgage process, but the truth is, it’s very simple. With the right guidance, resources and strategy, the second mortgage process is far less complex than that of traditional financing. In step 1, 3, 4, you’ll be given the opportunity to learn about the specific details of the second mortgage itself, thus being able to make informed decisions (Mortgage rate, term, payments, terms, etc.)  and will be prepared for each following step.

Call us today at (905) 455-5005 for a no obligation analysis, quote and strategy session.

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