Second mortgages are security instruments taking place behind a first mortgage and registered against a property’s title. They deliver a rapid injection of funds when the slow process of the banks just won’t cut it, leaving them popular in business loans to leverage equity that hasn’t been tapped yet.
As many know, gaining approval for business loans from major banks can be challenging due to their stringent loan policies and extensive documentation requirements. With separate, private lenders, a 2nd mortgage can be more straightforward and easier to set up, all the while still offering competitive interest rates.
Enter the professional, AFS-licensed funder, providing:
Various types of businesses utilise products offered by second mortgage lenders for different reasons, including:
$600,000
Newcastle Commercial Property
$3,000,000
68%
6mths
Loans are assessed immediately, and if everything is in order, we can settle within three days. If you were with a bank, it would take weeks to get your loan looked at.
Obtaining a short-term second mortgage often involves turning to private lenders as an alternative to traditional banking. In this approach, you secure funding from a non-bank entity like Pacific 8 through a mutually agreed upon contract.
Both parties, the borrower and the lender, are bound by the specifics outlined in the private loan agreement, which includes details like the repayment timeline and interest rates.
Whether refinancing is more advantageous than obtaining a second mortgage varies based on personal circumstances.
Refinancing through a bank can be challenging if you possess limited equity or a poor credit score. Moreover, a declined refinancing application due to a bad credit rating can further deteriorate your credit score, creating a challenging cycle from which to escape. Private lending offers a potential solution to overcome these hurdles.
A caveat loan relies on the equity within your property for security. When a caveat is established, it prevents the property from being pledged as collateral for any other financial arrangement.
Conversely, a second mortgage involves registering an additional interest on the title of a property with a primary lender’s security interest.
