Avail a Second Mortgage from a Toronto Mortgages Agent
Many places all over the world are facing an economic instability. Evidently, the expense of living has also increased considerably. Still, the individuals are not experiencing a significant growth in their incomes. This is in turn compelling many people to face financial crisis. To recuperate from this situation loan services and mortgages are running great demand.
Mortgages in general
A mortgage is a financial contract between the lender and the borrower, where the lender gives a certain amount to the borrower in lieu of his asset, secured as collateral. The asset is most often a real estate property. The borrower needs to return the money within a stipulated time, along with an interest, and its failure shall lead to loss of the asset. Many people who take the help of a Toronto mortgages agent are aware of this facility.
The concept of second mortgage
In this new system, the needful can use an already mortgaged asset for securing a second mortgage to get another loan. Toronto second mortgages act as a sub-ordinate mortgage while the primary mortgage remains effective. This is very helpful in cases where one requires an additional bulk of money on a short notice. Here are the details of this type of mortgage:
- If in case the borrower becomes a defaulter, the primary mortgage gets priority for clearance over the second mortgage.
- The rate of the second mortgage is higher than that of the primary mortgage.
- The amount borrowed from the second mortgage can be higher or lower than that of the first mortgage.
Factors determining approval of the application of a second mortgage
After submitting the application for a second mortgage to the Toronto mortgages agent, the next step is its approval. Here are some factors that determine this:
- The client is the owner of a house.
- The client’s house has equity.
In addition, some factors do not contribute to the application’s approval at all. They are:
- History of client’s employment.
- Client’s credit rating.
- His income ratio.
While mortgages have benefitted a large number of people, for some it may not be sufficient. In such a scenario Toronto second mortgages prove to be quite helpful.