How to Finance an Investment Property with a Second Mortgage Credit Line

Consider financing investment properties with a Second mortgage credit line- Nationwide can help you with all types of home equity loans and secondary home financing.

Second Mortgage Lines of Credit Can Be Powerful Financing Vehicles for Investment Properties and Buying a VRBO Home

Numerous homeowners are exploring opportunities for additional property investments, capitalizing on favorable pricing conditions. When considering the financial aspect of such investments, a second mortgage line of credit often emerges as a suitable solution. Obtaining a second mortgage or HELOC line is typically a straightforward process for homeowners who already own property.

Many second mortgages offer a flexible credit line, enabling borrowers to access funds as needed. Canton Street Mortgage highlights that a second mortgage is tied to the equity in the existing property, and, in most cases, the interest incurred is eligible for tax deductions.

The website delineates various purposes for which the borrowed funds can be employed, including home improvement, debt consolidation, financial investments, down payments for additional properties, or even car loans.

While offerings may vary among companies, Canton Street Mortgage, for instance, provides an example of a fixed-rate second mortgage with rates as low as 8% and up to 125% financing. It’s worth noting that home equity loans with bad credit may also be referred to as junior liens or subordinate mortgages, as explained by Bryan Wilson, a financing consultant with Nationwide Lenders.

Important Home Mortgage Loan Terms

Adjustable Rate Mortgage
Also known as ARM.  This mortgage has a variable rate that is not fixed. The interest rate adjusts periodically based on the index it is associated with.

Fixed Rate Equity Loans
Fixed rate loans enable principal and interest to be paid with each monthly payment. These loans feature simple interest that is amortized over a fixed term.
Home Equity Credit Line
Considered a 2nd mortgage that provides a revolving line of credit secured by home. Flexible home equity lines offer low payments with only the interest due monthly for the draw period.
Stated Income 2nd Loan
These loans have become popular with Self Employed borrowers because it requires less paperwork. The loan is based more on credit and equity, rather than income.
Jumbo Mortgage
This is an unconventional loan that is greater than $415,000. The limits are set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.