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  1. 08-01-2011, 10:41 PM #1
    donstone
    donstone is offline White Belt
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    Default 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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  2. 08-09-2011, 05:24 PM #2
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    Magic69
    Magic69 is offline Green Belt  
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    Yes, interest rates on second mortgages are ALWAYS higher and rightly so. They are higher risk for the lenders so you have to pay for that extra risk they assume.
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  3. 08-22-2011, 10:58 AM #3
    Alfie
    Alfie is offline Gold Belt
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    I agree, if you have a higher risk connected with you, you can not expect the bank to lend to you at a rate when you was less risky. They bump the interest rate up because there more risk of losing the payment (you declaring bankrupt) and as a deterrent because then everyone would want to take second mortgages out. It is a good policy, you want to take risks; then pay the price.
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