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Private Finance - Lenders for Second Mortgage Loans across Australia

Here at Lightspeed, we offer lenders for second mortgage loans in Australia. Second mortgages are sometimes required by borrowers when they require additional funds that their existing lender is unwilling to provide. Alternatively, there are times when the existing mortgage is secured at a competitive rate and the borrower needs additional funds for business purposes and a second mortgage is a cheaper option than refinancing the entire facility.

Second mortgages can be structured to assist investors to acquire properties for either investment purposes or where “value-add” or development opportunities are available. Lightspeed can offer second mortgages up to 75% LVR with very competitive pricing.

The Basics to Know About Second Mortgages Loans in Australia Before You Buy

First things first–a second mortgage is, traditionally, a short-term loan option that is secured against your existing property that runs concurrent to your existing mortgage. In regards to debt priority, a second mortgage comes after your first mortgage so that in the event of a foreclosure or you’re struggling to make repayments, the first mortgage is prioritised. (In this instance, the second mortgage would be fully or partially paid back with any additional funds secured from closing the first loan.)
Because the loan lender is inheriting increased risk and the mortgage owner is taking on additional debt while owing funds on an existing one, the risk is increased for both parties. As a result, the eligibility and lending criteria for a second mortgage can be quite limited–and the application process for a second mortgage can be significantly more challenging and in-depth than the process required for your first loan.
Before we go much further, it’s important to highlight that to consider a second mortgage as a viable solution for your short-term financial goals, the equity held in your existing property needs to amount to the total of both mortgages to meet the borrowing criteria for the second. In the industry, we refer to this as the Loan-to-Value (LVR) ratio–a key factor in deciding the eligibility of a second mortgage applicant’s approval.
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Second Mortgage Loans Across Australia

Sounds like a viable option for your home, family, or business? If you’re interested in learning more about the specific benefits and risks associated with second mortgages, we’ve summarised the most common highlights, and challenges, presented when taking out a second mortgage below.

Pros and Cons

The Pros

While the common path is to refinance an existing loan to a different lender, a second mortgage loan in Australia can be helpful for circumstances such as:
  1. Your first mortgage loan was built on a fixed rate, meaning potential exit fees may apply.
  2. You are helping your children purchase their first home. You can guarantee their loan by carrying out second mortgage finance on your property.
  3. If you are a developer a second mortgage could be just the ticket to secure fast funds in order to complete the project.
  4. If you are in business and you need to pay down some debts purchase stock or just complete a quick renovation a second mortgage can be a viable, fast solution.
  5. Purchase an investment property with a second mortgage that will then be used as a second (or third) income stream.
  6. Consolidating personal debts including Lines of Credit and credit cards.
  7. Freeing up cash to cover a large, one-off debt including tax bills.
  8. Undertaking home and property renovations that will ultimately add value to your home. This last benefit is a fantastic way to reduce the risk associated with both your first and second mortgage.

The Cons

  1. Second mortgage loans are used as a charge held over a property with an existing one against it. They are then ranked in order from which they were originally lodged.
  2. When any debt isn’t paid as intended and the property is put on the market, the first agreement is paid back in full before any additional funds can be paid towards the second mortgage finance. Because of these circumstances, this financial option is considered riskier for second mortgage lenders to approve, and thus, attract a higher interest rate.
  3. Typically second mortgage loan applicants enter these agreements for short term and have a clear plan on repayment so to avoid default issues.

Private Finance Solutions for Second Mortgage

Choose from flexible terms
At Lightspeed , we offer a number of convenient options under our second mortgage finance service:
  1. Short-term: typically 3-6 months terms longer terms can apply . The registration of a caveat is required as interim security before the mortgage is registered, which allows for fast and expeditious settlement.
  2. Intermediate:. These loans are typically competitive in terms of rate and LVR%, but the borrower may need more funds for business-related matters. Therefore, a second mortgage loan can provide a more affordable way to access financial assistance rather than refinancing.
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A Step-by-Step Breakdown of Applying for a Second Mortgage

Our Lightspeed Mortgage Management short-term second mortgage solutions are flexible, require less application documents than standard protocol, and can be approved within one-day for same week payments.
A basic overview of the process we carry out to get you applied and approved for a potential second mortgage includes:
  1. Submit an enquiry by phone or email. One of our friendly team members will touch base to discuss your unique circumstance and offer you an indicative quote with expected interest rates, costs, loan structure, and documentation needs.
  2. We allow clients to take the time needed to consider the proposal and decide if it’s the right solution for them. Have additional questions? You can always contact your broker to make sure you’re clear about the offer and agreement.
  3. For clients ready to make the move, LSMM will issue a formal offer. Clients are then asked to return the offer with the required document.
  4. Next, your broker will speak with our Legal team to request issuance of security documents or a valuation order, if needed. Once we receive the security documents, the process is settled by electronic transfer of funds.
Overwhelmed? Contact the Lightspeed team to streamline the process today.

What you can expect from Lightspeed as Your Trusted Second Mortgage Lender in Australia

At Lightspeed , we have built our reputation on transparency, professional financial solutions and general advice on second mortgage solutions. Better still, we offer fluid communications and a supportive style for our clients throughout Australia.
We offer a smooth process of application understanding that time is critical with many of our second mortgage requests. Our team is always available and online to assist with all questions and concerns that may arise.
When you apply with lightspeed for a second mortgage, you can always expect:

A simplified, streamlined process

Instead of relying on banks for support, you can work side-by-side with our helpful team to secure a second mortgage finance solution that works in your favour.

Fast approval time

While we need to tick boxes, we work as quickly as possible to approve your second mortgage application. Know where you stand at all times. In most cases a same day letter of offer can apply with a same week settlement *

Intermediate or short-term finance

When you consult with one of our professional financiers you are assured of the best advice available, we pride ourselves in honest and detailed discussions – confidentiality assured.

Frequently Asked Questions About Second Mortgages and Refinancing Your Home

At any time! The timing for a second mortgage isn’t as important as the LVR (Loan-to-Value Ratio) and equity you own in your existing property. A fantastic option for families and business professionals who need quick access to funding for property purchases, renovations, business expansion, or debt settlements, we look at each application on a case-by-case basis to determine your eligibility.

A home equity loan can be coined a second mortgage in the case that the applicant has an existing mortgage on an existing property.

Because first mortgages are prioritised during debt pay-off or settlement, the second mortgage (home equity loan) will not be fully or partially paid off until the first mortgage lender is settled. The reason why a home equity loan can be considered a second mortgage is that the equity in the existing property is valued against the total loan funding request.

In the instance where a borrower applies for a home equity loan without an existing mortgage (in the case of 100% full ownership and equity), the application for a ‘second’ mortgage is not considered an official second mortgage. Instead, it simply comes after the original mortgage was paid off and the lender is considered a first-line holder.

A second mortgage is a loan that’s borrowed against the equity you have in an existing property while that property still has its original (first) mortgage. Refinancing is replacing your primary loan with a new loan for better interest rates or after completing property renovations that may have affected the value of your home.

In the case of refinancing, applicants can look for a new lender, take on a new loan type, and negotiate interest rates and terms. Refinancing allows you to ‘repackage’ an existing mortgage into a repayment agreement that better suits your updated circumstances. A common reason for pursuing refinancing is securing a lower interest rate and more affordable monthly payment.

Different lenders can have drastically different criteria in order for applicants to qualify.

Traditional lenders, including the big four banks, most often require applicants own a large equity portion in their existing property, a good to excellent credit score, proof of recurring income, and a good debt-to-income ratio–including LVR. (Loan-to-Value Ratio–a key factor in assessing your application.)

The good news is that non-bank lenders, including LSMM, often have more flexible parameters that may better suit each applicant’s unique situation. To confirm if you qualify, reach out to our team to discuss your reasons for wanting to apply for a second mortgage and we can advise on a course of action.

Know what you can borrow in advance

All our financiers provide solid advice that ensures you know how much you are borrowing and to comfort you on a solution of finance that suits your situation. As one of the leading second mortgage lenders in Australia, we take pride in offering our customers clear advice and achievable repayment options to ensure we meet your short-term cash needs without compromising your financial future.

Find Out More About Lightspeed Second Mortgages – contact us now on 1300 133 406.

Whether you are a small business owner, a developer or running a public company, LSMM is an industry go-to for second mortgage lenders in Australia. We have the experience and expertise required to help residential homeowners and businesses of all sizes apply for and secure second mortgages. Our application and approval process are quick, and we aim to disburse the funds at the earliest, so our clients never have to spend time following up.
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