Second mortgages are just what they sound like, if you already have a first mortgage then the second for foreclosure purposes is in second place. The second mortgage is usually facilitated by a private lender although occasionally we will see one come from the bank who has the first mortgage.
What exactly is a Second Mortgage?
Second Mortgages are based on the appraised value of a property and can go to as much as 85% of that value but most will only go to 75% in major cities. While regular first mortgages look at going to 44% of your debt servicing ratio, most second mortgage lenders will consider higher debt ratio’s as they are more interested in the equity in the property than the actual debt ratios.