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Posted on 08/21/2019 in Second Mortgages

When a 3rd Mortgage Hard Money Loan Makes Sense

When to obtain a 3rd mortgage hard money loan, it is vital to first understand its meaning.

This type of mortgage is a lien on a property that goes subsequent / behind the current 1st mortgage and 2nd mortgage / heloc. A third mortgage may benefit you if you already have a 1st conventional mortgage and 2nd conventional mortgage / heloc. As conventional loans typically offer lower rates than hard money / private money loans, it would not be in your best interest to refinance the current 1st and 2nd mortgage, unless the mortgage is coming due soon and cannot refinance due to poor credit, self-employed, etc. Since Marquee can only go subsequent to conventional loans, we would need to refinance any current private / hard money loans. A third mortgage refinance with Marquee can be used for either consumer or business purpose.

Business purpose third mortgage refinance

This can be utilized to access equity in your home or investment property. Various loan purposes include: purchase an investment property, renovate an investment property, purchase a business, business operating capital, buying out a partner, etc. The maximum combined loan-to-value Marquee can go up to on a third mortgage is 70%. For example, if your property is worth $1 million, have a 1st mortgage of $300,000, 2nd heloc of $100,000, and need a $200,000 3rd mortgage, the CLTV equals 60%.

Consumer purpose third mortgage refinance.

This is primarily used for debt consolidation purposes. Examples of debt consolidation include: pay off credit cards, judgements, tax liens, medical debt, or foreclosure bailout. As explained in previous blogs, these forms of debt typically have interest rates of 20% or greater, while hard / private money loans through Marquee have rates starting at 7.99%. Please contact us to determine your exact interest rate as rates vary depending on loan-to-value, loan position, and credit worthiness.

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