Bill Lucas
Supporting Actor
- Joined
- Mar 20, 1999
- Messages
- 530
Erik,
Are you saying that you have an 85% first mortgage and a 15% second? The reason for the two mortgages is exposure. It appears that you put no money down on your home. When the mortgage lender factors risk the down payment (equity) that you put in plays a major role. They want to make sure that if things get bad and you walk from the loan that they are covered. If they lent you 100% of the value and you walked they would lose on the deal. Additionally people that don't pay their mortgages usually do not maintain their property proerly. In order for the first mortgage lender to have acceptable risk they find a second mortgage lender that will lend the balance at a higher rate.
Are you sure that you don't have an 80/15 with 5% down? Almost all conventional loans require SOME type of downpayment.
Your future borrowing power will limited by the amount of equity that you have in the property. The only loans that you will be able to get are "over equity" loans. As your real estate appreciates you will be able to get a more traditional second (by refinancing the current second) or third mortage. Hope this helped.
Are you saying that you have an 85% first mortgage and a 15% second? The reason for the two mortgages is exposure. It appears that you put no money down on your home. When the mortgage lender factors risk the down payment (equity) that you put in plays a major role. They want to make sure that if things get bad and you walk from the loan that they are covered. If they lent you 100% of the value and you walked they would lose on the deal. Additionally people that don't pay their mortgages usually do not maintain their property proerly. In order for the first mortgage lender to have acceptable risk they find a second mortgage lender that will lend the balance at a higher rate.
Are you sure that you don't have an 80/15 with 5% down? Almost all conventional loans require SOME type of downpayment.
Your future borrowing power will limited by the amount of equity that you have in the property. The only loans that you will be able to get are "over equity" loans. As your real estate appreciates you will be able to get a more traditional second (by refinancing the current second) or third mortage. Hope this helped.