FIRST AND SECOND MORTGAGES
When we use the words “first” and “second” mortgages, we are not referring to the individuals experience with mortgages but rather the position of the mortgage on a specific property.
When we use the words “first” and “second” mortgages, we are not referring to the individuals experience with mortgages but rather the position of the mortgage on a specific property. Once you understand this, you will realize that it is possible to have more than one “first” and “second” mortgages with 2 or more properties.
Let’s take an example to understand the concept:
You have a home with a first mortgage and you require additional funds for a down payment towards a purchase of an investment property. You find that it is too expensive to break your existing mortgage and refinancing so you decide to get another mortgage on your property.
This would be considered a second mortgage because it is registered (chronologically) to your property behind an existing mortgage.
Once you have successfully acquired the necessary funds, you purchase the investment property with first mortgage. Notice that we do not consider this to be a third mortgage! Since the mortgages are placed chronologically on properties, unless there is an existing mortgage on the property, this new mortgage is considered as a first mortgage.
Contact us today for full details about how we can work with you based on your financial profile. We are glad to discuss your mortgage-related questions or queries.
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