What is a Hard Money Second Mortgage?
A hard money second mortgage is a junior lien secured by real estate and usually issued by a private lender rather than a bank or conventional...
2 min read
Ted Spradlin : Jul 22, 2023 4:12:06 PM
This article outlines the requirements for a hard money second mortgage that you, as a borrower, need to have ready prior to applying for financing. The better prepared you are with your financial statements, personal and business documents, and property information, the faster you'll be approved and closing on a new hard money second mortgage.
My company, First Capital Trust Deeds (FCTD), has originated several hundred hard money second mortgages since 2013. We’ve worked with numerous entrepreneurs, real estate investors, developers, and private lenders to move loans from initial application to funding. As experts in all aspects of second mortgages, we know how to optimize the approval process.
The documentation listed below is what successful hard money second mortgages require to get approved and funded. Some items may not pertain to your situation. However, you'll see what does apply, and can ready them prior to submitting an application.
Before we dive into the requirements, I want to point out that I've written an article about hard money loan requirements, listing the general requirements and reasons why a specific document is required. The items below will just be a list of required documents for second mortgages without the detailed explanation.
Once the application and supporting documents are received, the lender will order and review credit and background checks, verify liquidity, open title and escrow, and order a valuation. Many details are handled behind the scenes, including:
Each second mortgage has several unique circumstances to work through. No two situations are alike, which can make hard money second mortgages a challenging puzzle to put together. Or, if we’re lucky, a relatively easy puzzle to solve.
Conclusion
If you're in the market for financing, you’ll want to prep and organize the above paperwork so you can submit a complete application for a hard money second mortgage with supporting documentation. The better organized you are, the quicker the possibility of approval and funding, provided the appraised value comes back at the expected level. A little (or a lot of) planning goes a long way.
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