A 2^nd trust loan program calls for two separate mortgages—a first and a second. Usually, borrowers may opt for a 2^nd trust loan when they do not have 20% for a down payment, and they do not want to pay for private mortgage insurance. For example, one type of 2^nd trust loan is an "80-10-10". On a house with a market value of $100,000, you would take out a first loan for 80% or $80,000, a second loan for 10% or $10,000, and make a down payment of $10,000. Some lenders have different versions of this, such as "75-15-10", and so on. Regardless of the percentages, all second trust loan programs are designed to make sure that your down payment and your second mortgage give you 20% equity in the house so that private mortgage insurance is not required.

As previously stated, 2^nd trust loans are designed for borrowers who can’t make a 20% down payment, but don’t want to pay private mortgage insurance. In many cases, private mortgage insurance can add hundreds of dollars a year to your mortgage payments; in most cases, your mortgage insurance cannot be dropped until your home equity reaches the 20% level. Additionally, private mortgage insurance is not tax deductible, whereas mortgage interest often is tax deductible. That means that everything you pay, excluding late payment penalties, is going to pay down the interest or the principal of your loan.

• Having a second mortgage means that you have to write two separate mortgage checks every month. Some people may feel that this is too much trouble, especially if you have a tendency to be late.
• The interest rate will be higher on the 2^nd loan, and you will likely incur the additional expense of getting two loans.
• Your monthly payments may be higher with a 2^nd trust loan.
• You cannot get a home equity line of credit until your 2^nd trust loan is paid off in full.

Borrow123.com neither posts interest rates for 2^nd trust loans online nor offers instantaneous online approval for 2^nd trust loans. What this means is that you simply have to work a little more closely with your loan consultant to procure a 2^nd trust loan. Once we know that you are interested in a second mortgage, you may either call one of our loan consultants, send us an e-mail, or continue to apply for your first mortgage online. After a loan consultant reviews your application and discovers that you want subordinate financing, they will contact you for confirmation, additional information, and our 2^nd trust interest rates.