1st Mortgage – The Perfect Way For Financing Your Home
A first mortgage is the primary loan used for the purchase of a property. First mortgages are long term loans with a 30 year loan term. If you have already purchased a home and are looking for capital to buy to a new one, then first mortgage options work best.
In other words, this financial solution is a secured loan where you provide the lender with your property as a security for the loan. It usually includes lower interest rate, compared to caveat or second mortgage loan options and is quick to process. However, if you fail to make the repayments on time, the lender will have all the right to take possession of your property to recoup the amount you owe on the loan.
Primary Differences Between Second And First Mortgage Loans
Second mortgage loans are placed behind the first Mortgage Loans. The lender of a second mortgage loan will have secondary rights on your property whenever there is a repayment default. They will receive the remaining amount from the property sale after you have repaid the first mortgage finance.
Most traditional lenders do not offer second mortgages as they are higher in risk. However, those who approve a second mortgage usually offer the loan at higher interest rates than traditional mortgages. Also, in some cases you have to get permission from the first mortgage lender to get approval for the second mortgage. It is only applicable if you apply for a second mortgage loan through a different lender.
A second mortgage loan is a great idea if you have built up equity in your property over time, but your lender you have your first mortgage with has refused additional finance. You can increase the equity by making loan repayments on time and increasing the property value.
How Does A 1st Mortgage Work?
First mortgages usually work in the following three ways.
1. Signing a mortgage providing the lender with security over your property
This will give the lender security over the property until the borrower can repay the debt. You will sign the mortgage when you sign the contract paperwork for your 1st mortgage loan.
2. The Mortgage will get registered with the appropriate department
The lender will then register the Mortgage with the government department within their territory or state. The borrower has to pay the current registration costs involved with this.
3. The Lender will have control of the registered certificate of title for your property
The borrower cannot sell the property without repaying the amount owing to the first mortgagee. Once the borrower has fully repaid the 1st Mortgage loan, you can apply for the discharge of your property in the following ways.
Notifying the lender about the property discharge
You should inform your first mortgage lender about the property discharge decision and fill out the discharge authority form. If you still have a loan to repay and want to sell the property beforehand, then the lender will have the right to take out the remaining amount from the sale proceedings. The borrower will get the leftover capital after that.
The lender sends the form to the concerned government department
The first mortgage lender will then send the discharge form to the appropriate government department, which will charge some mortgage discharge fees. The first mortgage loan lender may have some charges if you want to discharge your funds early.
You must be the title certificate owner for the property
To obtain a 1st Mortgage loan you must be the owner of the property that is registered on the certificate of title. After repaying the 1st mortgage loan amount the title becomes unencumbered once the mortgage is discharged..
How To Use The Funds From First Mortgages?
The most common use for first mortgages is to use the funds when buying residential investment and owner-occupied properties. However, you can also use the loan funding for long and short-term purposes like:
- Property development
- Other company and business requirements
- Buying a new business
- Extending your current business operations
- Funding commercial property premises
- Purchasing business equipment
Why Select LoansOne For First Mortgage Services?
The borrowers use LoansOne for their first mortgages because of the following reasons.
Faster Turnaround Times
LoansOne understand how vital it is to get mortgage funds as rapidly as possible.
Competitive Interest Fees
LoansOne will source the best interest rates and terms for their clients from the range of lending partners.
Customized According To The Client’s Needs
Our financial specialists work with the borrower throughout the loan application process to ensure delivery of the loan according to their needs.
The LoansOne team is dedicated to providing first mortgage finance with speed, security, reliability and security.
Want to know which loan product is perfect for you? Call LoansOne today and find out how we can assist with first mortgage finance today.
Call us now at 09 888 5252 to learn more about our first mortgage. You may also drop us a message via our contact page, and we’ll get back to your enquiry as soon as possible.
Frequently Asked Questions
This will depend on the Lender and their eligibility criteria. Initially, all property owners ID are required, along with a copy of a rates notice and mortgage statement for each security property.
This will depend on the Lender and their eligibility criteria. In most cases you will need to be employed or operating a business to qualify
Simply click on the “Apply Now” button to start your loan enquiry
It will depend on the lender but it will increase your chances of approval if you have good credit
First mortgage is security, is where a borrower offers a property as a security to a lender to secure a loan against it in first position.