Second Mortgage Denver Colorado

There are advantages and disadvantages to the second mortgage loan.

Advantages of Second Mortgage Colorado

Relative to unsecured types of debt, like the personal loan, a second mortgage is generally more affordable. It also might be easier to obtain, depending on current trends in the mortgage industry. Borrowers interested in a second mortgage have the option of an adjustable-rate home equity line of credit (HELOC) or a fixed-rate home equity loan.

Disadvantages of Second Mortgages Colorado

The primary disadvantage of the second mortgage is that it is a securitized debt. If the borrower fails to make scheduled second mortgage payments, they would be subject to foreclosure. Unsecuritized personal loans are not tied to real or personal property.

Lenders will usually look for the following when considering a second mortgage application:

  • High equity in the first mortgage
  • Low debt-to-income ratio
  • High credit score
  • Solid employment history

A second mortgage typically refers to a secured loan (or mortgage) that is subordinate to another loan against the same property.

In real estate, a property can have multiple loans or liens against it. The loan which is registered with county or city registry first is called the first mortgage or first position trust deed. The lien registered second is called the second mortgage. A property can have a third or even fourth mortgage, but those are rarer.

Second mortgages are called subordinate because, if the loan goes into default, the first mortgage gets paid off first before the second mortgage. Thus, second mortgages are riskier for lenders and generally come with a higher interest rate than first mortgages.

In most cases, a second mortgage takes the form of a home equity loan and the two are synonymous, from a financial standpoint. The difference in terminology is that a mortgage traditionally refers to the legal lien instrument, rather than the debt itself.

The term length of a second mortgage varies. Terms can last up to 30 years on second mortgages; however repayment may be required in as little as one year depending on the loan structure.

Apply for your Denver Colorado Mortgage and get pre-approved

Vince, the “Colorado Mortgage Guy,” is the mortgage broker to go to in the initial phase of the refinancing. He has been doing mortgages in Colorado since 1991. Vince specializes in conducting the refinance process in a manner that certainly meets and exceeds the client’s expectations. Vince is very proud that most of his Colorado Mortgage business is derived from past client referrals. Vince understands that each and every Colorado Home Loan transaction is someone’s future.

Vince Reece
Senior Loan Officer
Plum Creek Funding, Inc.
303-818-0699 (Cell)
303-840-0966 (Office)
877-840-0965 (Fax)
Email
19519 E. Parker Square Dr. Parker, CO 80134

 

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