Even within private equity we have to say that it is difficult to get second-rate mortgages .
Luckily there are always companies and private finance companies which can do it.
Next we are going to explain what these second rank mortgage loans consist of, making known their usefulness.
Of that there is no doubt, these are private loans with many uses in the market.
It allows clients to obtain immediate financing, being one of the best options in the sector.
Second-rate mortgages Why are they hard to come by?
They are because almost no financier or lender is willing to make a mortgage under these conditions.
What does second rank mean?
Basically what it means is that the property used as collateral currently has a first debt / mortgage.
This therefore means that if the first debt is not canceled with the new loan, a second charge / mortgage is generated.
The risk on the part for the private or financial lender that makes the loan is much higher.
It is because if for any of these there were a non-payment, whoever has the facility to collect, through the property it is who has the first mortgage .
The one who has signed on the contrary the second mortgage may in the end not collect.
It all depends of course on the amount of the customer.
We give you an example so that it is understood.
A client has a property valued at € 200,000, with the same mortgaged for € 30,000.
You have this mortgage with a bank that is up to date and you need € 20,000 of liquidity to open a business.
Well, through this option what you do is make a second rank mortgage of € 20,000, leaving the first one like this.
In this way, the property will have two mortgages, a bank mortgage of € 30,000 and another private mortgage of € 20,000.
That is why it is called this way.
Where we can get second rank mortgage loans
With us for example.
From our company you can access second rank private mortgage loans .
Now, it must be clear that there must be plenty of room.
Let me explain, if the property is valued at € 100,000 and has a charge of € 40,000 in front of it, there will be no margin to make a second charge.
Nor if the property has a charge of € 30,000 instead of € 40,000.
In private equity mortgages, there is usually no more than 35% of the property's appraisal.
But it is also that in second rank mortgages this percentage is usually reduced.
Unless you have a property whose value is much higher than the load it has, it will not be valid in this way.
There are other private finance companies that also accept to make this type of fast loans although they are in the minority.
Advantages of these second rank private equity mortgages
The main advantage is that customers do not have to cancel their first load.
Let's say the client has a property valued at € 500,000 and has a first mortgage of € 50,000 per bank.
You only need € 10,000 of liquidity.
Most companies will not offer you a € 10,000 mortgage but a € 60,000 mortgage (50 + 10)
And of course, having to cancel a bank mortgage for a private one (plus cost) to only get € 10,000 of liquidity may not be ideal.
Thanks to these loans between individuals you can request only € 10,000 in second rank.
Hence, second-rank mortgages in private equity are well valued.