A Napa homeowner obtained an owner occupied private money second mortgage from First Capital Trust Deeds.
FCTD does quite a few second (and even third) trust deeds each month for homeowners and real estate investors in California. Which is nice because there is a strong demand for non-bank junior financing.
What’s nice about our second and third trust deeds is that they’re relatively easy to qualify for as long as the borrower has good income and sufficient protective equity in their property.
The trust deed investors funding second mortgages don’t get too technical about the debt-to-income (DTI) ratio the way conventional lenders and banks originating home equity lines of credit (HELOCs) tend to do. However, they do run the numbers and make sure that the borrower will be highly likely of making timely payments on their loan along with the homeowner’s first mortgage.
For our homeowner client in Napa who needed a small $105,000 second mortgage, the loan worked really well for them and the trust deed investor who funded the loan. The balance on their conventional first mortgage was only $225,000 (33% LTV) which meant that there would be over $335,000 in protective equity remaining in the property after the $105,000 second trust deed was recorded.
Owner Occupied Private Money Second Mortgage Terms:
- $105,000 Loan Amount (48% Combined Loan-To-Value (CLTV))
- 9.75% Interest-Only
- $853/Month Payment
- 20 Year Term
- 6 Month Prepayment Penalty