FEATURE
Secret Weapon Second’s By Bob Eakin, JCAP Private Lending
S
collateralize or do a “blanket loan” the LTV is still the same. One of the benefits of a second mortgage is that it allows your client
econd mortgages have long
and home renovation.
been used to get borrowers
“what do you do when your client
cash quickly when they have
needs more cash-out”?
So we ask A straight
to
borrow
significant
amounts.
Because the loan is secured by real estate, they have access to more than they could get without using
real estate to use as collateral. In
refi perhaps would come to mind
this article we’ll go through exactly
but they may not need the cash long-
what a second is, good examples of
term. A good option could be a 2nd
when it should be used, the benefits
on an existing investment property.
to a broker, and some things to look
You get paid for booking another
out for.
loan and your client gets the cash to
65% on a stated income loan. That
A second mortgage is a loan that
invest in other properties or cash for
maximum would count all of your
uses real estate as collateral while
their business. Your client may be
home loans, including first and
there is another loan secured by that
able to get up to 65% LTV on a stated
second mortgages.
real estate. People use these loans
income 2nd’s program or up to 80%
Good 2nd’s scenarios:
for all types of business ventures
with traditional blanket. If you cross
• If your borrower wants to sell their
24 Originate Report | September 2019
real estate as collateral. How much can be borrowed? It depends on your lender, but you might expect to borrow up to 80% of the home’s value on a full doc loan and up to
