Second Mortgages on line are normally used in conjunction with a primary loan. Typically the secondary mortgage will have a term of no less than five (3) years with interest only payments. While additional mortgages can be critical in some situations, you must carefully consider your ability to pay the primary, plus secondary loan.
Second Mortgage Advantages
Second Mortgages on line - There are many clear advantages to this type of creative financing. The most frequent use is a secondary mortgage that reduces the Loan to Value of the first loan in order to allow you to more easily qualify for the loan. An good example would be where the primary lender or first mortgage holder will only lend 70% LTV and you only have a 20% down payment. A second mortgage can be used to make up the difference.
There are a variety of options available to you such as: interest only payments, annual payments, balloon paymrnts, etc. that will help keep your immediate payments down and defer the costs of the mortage. The idea is to give the property time to appreciate and thereby allow you to refinance and consolidate both the first and second mortgages at a later date at a then lower LTV.