What’s the difference between a first and second mortgage?

When we use the words “first” and “second” mortgages, we are not referring to the individuals experience with mortgages but rather the position of the mortgage on a specific property. Once you understand this, you will realize that it is possible to have more than one “first” and “second” mortgages with 2 or more properties.

For example:

• You have a home with a first mortgage and you require additional funds for a down payment towards a purchase of an investment property.
• You find that it is too expensive to break your existing mortgage and refinancing so you decide to get another mortgage on your property.

This would be considered a second mortgage because it is registered (chronologically) to your property behind an existing mortgage.

Once you have successfully acquired the necessary funds, you purchase the investment property with first mortgage. Notice that we do not consider this to be a third mortgage! Since the mortgages are placed chronologically on properties, unless there is an existing mortgage on the property, this new mortgage is considered as a first mortgage.

We have been helping clients in Toronto, acquire first and second mortgages for a variety of different reasons, based on various circumstances. Mortgage Magic services will help you find the right solution based on your current situation and help you achieve both your short and long-term goals.