Let’s say you own a home (and a mortgage) but you need to borrow money. You may need to borrow money to start a business or to do home repairs. Where will you get the money from? Since you are borrowing money, it means that you have no extra money lying around – but, you do have a house. And that’s what a second mortgage is: it’s the ability to borrow money using your house as collateral. This is also called a Home Equity Loan.
Let’s say your home is worth $300,000 and your mortgage is $225,000. A second mortgage can be as high as $75,000. That’s a significant sum of money! But you have to be careful: if you don’t pay back your loans, the bank or lender will foreclose on your home and you will lose your house. Losing your house due to non-payment is severe. As such, we recommend that you only take out a second mortgage if there’s a good reason to do so. Two typical reasons why a second mortgage makes sense are:
HD Lending is one of the few establishments which offer Owner Occupied Hard Money 2nd Mortgage Loans. That’s a mouthful but the meaning is simple: instead of borrowing money from a bank or credit union, you borrow from private investors. First, you take out a hard load to purchase the primary residence (Owner Occupied Loan) and then you take out a 2nd mortgage loan using the house as collateral.
Owner-occupied hard money 2nd mortgage loans hold the same risks as a 2nd mortgage from a bank. Namely, if you fail to make your payments, the investors will foreclose on your house. Contact us by email or telephone: (480) 688-8688.