Second Trust Deed Loans

What is A Second Deed of Trust?

Whether you call it a second mortgage or a second trust deed, these terms describe the same financial instrument. This type of mortgage is a lien against the home you’re currently paying for. Taking out a second mortgage means placing a lien against the paid-off portion of your current home.

How Does A Second Mortgage Work?

As you know, mortgaging your home means making regular payments towards owning this property. Having equity in your home is great—it means you’re close to owning this property. However, unlike cash or something similar, you can’t typically use this equity because it’s going towards paying off your home. A second mortgage lets you use a portion of your home’s equity.

The requirements for obtaining a second deed trust vary between lenders. Here are typical requirements lenders have for second deeds of trust:

• Some amount of equity in your home (typically a minimum of about 20%)
• A decent credit score (typically at least 620)
• A favorable debt-to-income ratio (typically under 43%)

Second Mortgage Vs. Refinance: What’s The Difference?

When looking into second trust deed loans, you may wonder how they differ from home refinancing. Taking out a second mortgage means adding a brand-new mortgage payment to your list of monthly expenses. However, refinancing your home means replacing your paid-off original loan with a new one with updated loan terms. When refinancing, you’ll only have a single payment going towards your mortgage.

Lenders that refinance mortgages understand a lien already exists against a property. If you don’t continue making agreed-upon loan payments, this lender can legally take back this mortgaged property. Second mortgage lenders don’t have this same assurance.

Explore Your Borrowing Options at Lend 4 You

Lend 4 You is a mortgage broker ready to help you obtain a second trust deed loan. Our team has decades of experience in the industry. Utilize our superior network of nationwide lenders, letting you obtain a second mortgage with the best possible rates and terms. We often get approvals for our customers in only 24 hours!

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