What equity do I need for 2nd mortgage finance?May 28, 2020
Will I be approved for private finance?May 28, 2020
A second mortgage sits behind a mortgage registered against the title of your property. Hence, the first mortgage is placed there by your bank. Consequently, second mortgage finance allows access to equity without the need to refinance the first mortgage.
As the first and second mortgage loans are separate facilities’; there are still equity limitations. Let’s look at this example:
- Home Value – $500 000
- Current Home Loan – $100 000
- Available Equity = $400,000.
Given that, private finance can access a portion of the $400,000 up to their maximum allowable LVR.