2nd Mortgages do Exist

Thanks Dave for this great information:

Quite often I hear from clients that another mortgage company or bank tells them that 2^nd mortgages do not exist. This is usually because that company is not approved to do them or chooses to not do them. But I promise they do exist. Why would a buyer choose to do a 2^nd mtg:

• Avoid mortgage insurance. Many times avoiding mortgage insurance is beneficial for a couple reasons: a lower payment and the interest is tax deductible. Over the long term mortgage insurance is not tax deductible.
• They have a home to sell and do not have the 20% down payment. So they take a 2^nd mortgage and pay it off after their home sells.
• Avoid a Jumbo Loan. Jumbo loans offer higher rates. The buyer could break their mortgage into 2 mortgages. The first mortgage of $417k and a 2^nd mortgage the remainder. This would allow them to avoid that higher Jumbo Rate.
• The 2^nd mortgage maybe more flexible then the underwriting of a Mortgage Insurance Company

Now for things to keep in mind for 2^nd mortgages:

· The client must have very good credit(680+)
· The rates range from 6.99% to 8.99%(depending on credit score, down payment, etc)
· If they plan on paying the 2^nd mortgage after selling their house there is a 1% penalty(of the loan amount)
· The 2^nd mtg can be from $10k to $100k

Please call me with any questions.

Thanks again,

David Krichmar
Mortgage Banker/Broker
Moncor Mortgage Bank
cell:832-689-6012
fax:832-204-3353

David.Krichmar@gmail.com
www.DaveYourMortgageGuy.com
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