100% Finance



From: Funky Whuff

Does anyone in here know anything about second mortgages or bridging finance? Any explanations would really help. Thanks.
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Reply: 1
From: Rolf Latham

Hi Liz

Second Mortgages are a mortgages on a property where there is "prior ranking debt" ie a first mortgage.

Second mortgages are commonly used where you are locked into some deal that is very expensive to get out of. So you do not want to refinance that. So you go to another lender and if you have enough equity, they will lend you cash secured by a second mortgage.

Should you fall over the first mortgage holder gets first go at the assets, the second mortgage holder obviously gets whats left over.

Some lenders will go to 85 % LVR on second mortgages.

Second mortgages can alos be used to secure your IP to your home, so you cn borrow 100 + % of the IP purchase. What you are doing here is spreading equity. This is called cross-collateralistion and should be avoided if possible for better flexibility.

Bridging finance is simply where you have not sold or settled on a deal and need to settle on a new one. Common where Ma and Pa have bought a new residence, have sold the old one but the sale for the old one has fallen through. Can be expensive but usually not too cruel if you can get it


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