by cindy_1 » Mon May 04, 2009 05:21 pm
We are considering lending as a private loan and putting a lien on the equity in the property but would be listed in second position and would like default insurance. Is there anything like this available on a second?
Posted: Tue May 05, 2009 04:11 am Post Subject:
Hi Cindy,
I'd just like to make sure that you're aware of how the mortgage default insurance works.
Are you aware of the "critical risk" that the mortgage default insurance is meant to cover?
Mortgage default risk is not exactly associated with a foreclosure resulting out of a home owner's financial adversities. That's the reason I'm asking you about it. Roddick
Posted: Tue May 05, 2009 06:47 am Post Subject:
Hi Cindy, I'm considering here the question of affordability. It seems that you already have a loan on the property which you are paying off. I presume you have insurance on it too.
A second mortgage would always have a higher rate than the primary one, which would add to your mortgage expense. You may need to evaluate how much you would be able to afford in paying premium for the additional coverage on the second loan.
However, I think this type of loan is available. You may have to check with you current mortgage insurer about it.
~Jeremy
Posted: Wed May 06, 2009 12:14 pm Post Subject:
Hey Cindy..
A second mortgage is always achieved against your house equity.
One needs to present a home appraisal to the lender in order to check the worth of the home equity. Lenders would never like to approve a second loan which is even higher than your home equity. Lender of the second mortgage is always at a greater risk.
People do look for home equity insurance or a similar product and I'm sure you know the reason..am I right!
Steven
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