Posted: 1 Sep

How Difficult is it To Get Approved for a Second Mortgage?

How Difficult is it To Get Approved for a Second Mortgage?

Homeowners looking to take a second mortgage on their properties are often skeptical of the loan product to choose and the lender to work with. If this sounds like you, we have you covered. Call us today to discuss your options.

What are Second Mortgages

As the name suggests, second mortgages are loans taken against a property on top of an active or existing mortgage. Like the first mortgage, your second mortgage is secured by your home. This means that the bank or lender can claim ownership of your property in case of default.

Who Qualifies for Second Mortgages?  

To qualify for a second mortgage, you must meet some qualification requirements. These include:

  • A minimum credit score of 640. If your credit score is above 700, more lenders will be willing to offer you a second mortgage at lower interest rates. 
  • Maximum debt-to-income (DTI) ratio of 43%. In other words, your total monthly expenses or debts should not exceed 43% of your monthly income (before taxes).
  • History of stable income and proof of employment. Lenders would need to verify that you have a stable source of income to ensure you can make the monthly payments.   
  • Use your property as collateral, leaving 15% to 25% equity in your home. 

And while it’s necessary to meet the above requirements to be eligible for second mortgages, some private lenders and trust companies may offer more favorable guidelines. However, you want to watch the rates to ensure the cost of borrowing the loan isn’t too high. 

Where Should You Get Your Second Mortgage

You can always get your second mortgage from your original lender. However, most homeowners choose a lender with the least rates and favourable terms. That means you are more likely to use a different bank/lender or a trust company, depending on the mortgage product you want. 

Ideally, you want to use a lender or trust company that offers fixed and adjustable rates. Some also offer favorable terms regardless of the rates you got with your first mortgage. The ease of applying for these second mortgage products is another factor to consider when choosing a lender.  

Is Getting Approved for a Second Mortgage Difficult?

Getting approved for a second mortgage is generally more difficult compared to securing your first mortgage. This is because you now have a bigger loan to repay, increasing the risk of default. Most lenders are aware of this risk and seem very selective when giving out second mortgage products. This definitely doesn’t mean that it’s impossible! At BMC Mortgage & Investments, we have been working with clients for over 40 years get approved for second mortgages regardless of their income or credit. Call us today to find out how!


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