How is lending criteria different for second mortgage lending?May 28, 2020
Can you explain property equity?May 28, 2020
Short term business loans such as caveat loans and second mortgage loans are higher risk for a lender. As such, this is a result of minimal income and other credit requirements. Consequently, to reduce lender risk, lenders require more equity.
Private lenders usually require 25% equity; or a maximum 75% LVR inclusive of closing costs, fees and capitalised interest. In some cases, you may obtain capitalised loans payments. For the same reason, risk reduction would require a strong exit strategy along with your ability to meet payments.