If you’re one of the lucky ones who bought or refinanced when interest rates were in the 2’s and 3’s, you may be hesitant to tap into your home equity for a second mortgage even if it is a substantial amount. We have some great news! If you have equity you want to leverage toward another investment, use to consolidate debt, or start a new business, we have a way for you to tap into it without letting go of your amazing interest rate. You just need the right mortgage team to help.
We work with clients every day who want to make smart moves with their home equity without losing their great first mortgage. That’s where a standalone second mortgage comes in, and it might be exactly what you’ve been looking for if you want to access between $200,000 and $1,000,000; here’s what you need to know.
What is a Standalone Second Mortgage?
A standalone second mortgage allows you to borrow against your home’s value without touching your existing first mortgage. You may have also heard it called a “home equity second” or “piggyback loan.” That means you can hold onto the low rate you locked in years ago and still access the equity you’ve built.
This is especially helpful right now, when mortgage rates are higher than they’ve been in recent years. If you refinance your entire loan to pull cash out, you risk giving up a historically low rate for a new one that might not be as favorable, but with a standalone second mortgage, your first loan stays right where it is.
What Can I Use a Standalone Second Mortgage For?
Second mortgages can open up opportunities when your personal life or business calls for flexibility. You can use this type of loan to consolidate high-interest debt, by paying off credit cards, personal loans, or medical bills with a lower interest rate and potentially one predictable monthly payment. It might also be the perfect way to start or grow your business. You can use your equity to invest in your next venture without tapping retirement funds or liquidating other assets.
If you’re looking into buying an investment property, a standalone mortgage can help you reach that goal more quickly. By using the funds to jumpstart your real estate portfolio while keeping your primary residence loan intact, you can accelerate your real estate success.
Qualifying for a Standalone Mortgage
When we approve borrowers for a second mortgage, we can look at a variety of things to determine eligibility. One thing we love about the second mortgages we offer is how accessible they are, even if you don’t fit the traditional lending mold. We can work with:
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Bank statements
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Profit & Loss statements (P&L)
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1099 income
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Property cash flow (for investment properties)
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Traditional tax returns
This kind of flexibility means we can often find a solution even if your income or finances don’t fit the standard W-2 box. Self-employed? Real estate investor? Gig worker? We’ve got you covered.
What is the LTV Ratio for a Standalone Mortgage?
Our standalone second mortgage options allow you to finance up to 90% of your home’s value (combined between your first and second loans), giving you access to more of your equity without over-leveraging your property.
That means more flexibility, more opportunity, and more room to make your money work for you.
A standalone second mortgage can be a strategic way to access your home equity, especially when you’re trying to preserve a great first mortgage rate. Want to learn more about accessing your home equity? We’re here to answer all your questions. Contact us any time to get started.
