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Why You Must work with a Broker when Getting a Second Mortgage

2 April, 2012 / by Bryan Jaskolka

Getting a Toronto second mortgage should be fairly easy, right? You already have a first mortgage and now you just need a little extra cash. Like the smart borrower you are, you know that taking out a second mortgage will cost less in interest (and therefore, less overall) than any other kind of debt, so you go to your lender with plans to apply for one. However when you get there, you’re faced with all kinds of questions you didn’t think would be part of the process; and your answers might actually force you to pay much more for your second mortgage than you thought you’d have to. That’s where a Toronto mortgage broker comes in – they’re the only resources you should use when obtaining a second mortgage.

One of the main problems with going to the lender yourself for a second mortgage is that there are many rules and categories that the average homeowner might not be aware of. If you want a second mortgage in order to build a house for example, instead of just issuing a second mortgage, the lender could create an entirely new construction mortgage – something that could come with a higher interest rate, and higher payments than you had bargained for. A Toronto mortgage broker however, knows that this could happen and also has their own arsenal that’s ready to use, and ready to help you around those lender requirements. In this case, one Toronto mortgage broker had his client pay off his first mortgage early and then got the client a matrix mortgage – one that has a fixed or variable rate upfront for the money that’s owed, and then a HELOC on the back end of the loan. It saved the homeowner thousands, while still allowing them to build their second dream home.

Others, such as those who are self-employed, might have an incredibly tough time getting a second mortgage – especially if they go through the banks, and even more so if they have bad credit. Banks will look at the fact that they are self-employed (a group that lenders are now very wary to give mortgages of any kind to,) and they will also look at their credit score. A Toronto mortgage broker however, will work with a long list of lenders that will only look at the equity the homeowner has in their home. The more equity you have, the better chance you have of getting approved for a second mortgage loan. It really is as easy as that.

Getting a second mortgage in Toronto without using a mortgage broker is like getting behind the steering wheel of a car when you don’t know how to drive. Go it on your own, and you really just have to hope that you don’t end up crashing and burning. A broker though, will talk you through all the twists and turns, so you arrive at your ultimate destination safely.

          

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