Second Mortgages
A second mortgage is an amount borrowed (or a loan) on a property that already has a mortgage on it. In other words a second mortgage is an additional loan on a property. You can use your home as collateral and borrow the money you need against it. These types of loans are appropriate for times when you need a lot of money and by borrowing against your home you may be able to get a larger sized loan.
Second mortgages are mostly used for the following reasons:
- Home improvements
- Avoiding Loan Mortgage Insurance (LMI)
- Debt Consolidation Programs
- Purchasing additional homes
It is important to weigh up the advantages and disadvantages of these types of loans. Some of which are as follows:
Advantages:
- Avoids the need to inject your own deposit monies into the deal
- Avoids the need to pay LMI on your first mortgage if you have an insufficient deposit to avoid it
Disadvantages:
- May inhibit your ability to obtain first mortgage finance on the property if your financier is aware of your intention to use second mortgage money for the deposit
All terms and conditions indicated by Great Southern Loan Pty Ltd are subject to change. Actual terms and conditions of all loans will be set out in the loan contracts.