Second Mortgage Loans in Orillia

Obtaining a second mortgage is taking out an additional loan on a property that already has a current, active mortgage. This is a risky proposition for the lender who would be loaning the money, as they would be paid out after the lender on the primary mortgage. This means if the homeowner defaults on their payment agreement and the home is foreclosed on, any proceeds from that sale will pay the primary lender first, meaning the second will likely not recover their loan. To offset the higher risk, rates and terms on a second mortgage are never as good as for a principal mortgage.


An alternative to a second mortgage, for homeowners that have decent credit and at least 20% equity, the wisest choice would be to obtain the loan in the form of a home equity line of credit. On the other hand, if your credit rating is not that strong, or if you owe more than your home is worth, then getting a second mortgage through a private lender or trust may be the only option.

What Can I Use A Second Mortgage For, And How Would I Qualify?

Having a second mortgage can be an ideal way to consolidate debt, particularly credit card debt or a vehicle lease, that has a higher interest rate than the mortgage would. If you make the choice to utilize your second mortgage to consolidate debt, this can be a viable tactic for improving your overall credit score and help you get ahead.


To qualify for a second mortgage, with their name in the second position, your potential lender will look at four factors:

  1. Credit Score – Of course, the better your score, the better your rates and terms.
  2. Property – Due to the volatility of other factors like your credit score, collateral is often needed.
  3. Income – How much you make and your debt to income ratio. Your lender wants to ensure you have the income to pay the payments.
  4. Equity – More equity gives a better chance of qualifying. This goes hand in hand with the property.