Second Mortgage Loans

A defined amount with a separate payment

Unlike a revolving line, a closed-end second advances a defined loan amount. The first mortgage remains outstanding and the second loan adds its own repayment obligation. TQL’s published closed-end second guidelines list loan amounts from $50,000 to $500,000.

The program includes fixed terms of 10, 15, 20, 25 and 30 years. Any balloon or interest-only structure requires its own payment and eligibility review; a lower initial payment should not be mistaken for lower total repayment.

Combined leverage drives the review

Combined loan-to-value includes the first mortgage and the proposed second loan. The published matrix varies by credit score, occupancy and loan size. At the $350,000 tier, the 740-score primary-residence maximum is 90% CLTV; second-home and investment caps are lower.

Combined balances above $2 million cap at 80% CLTV, and above $3 million cap at 75%. Total combined balances cannot exceed $4 million. The general minimum credit score is 680, while investment tiers require stronger scores.

Your first loan must also qualify

The underwriter needs the first-lien note and the most recent mortgage statement to confirm principal, interest, rate features and escrows. The total housing obligation counts in debt-to-income qualification.

Examples of ineligible first liens include reverse mortgages, a HELOC in first position, negative-amortization loans and active forbearance. A balloon becoming due during the new second loan’s amortization period is also ineligible.

Compare the full cost of keeping your first mortgage

Keeping an existing first-lien rate can be useful, but compare both payments, fees and the repayment schedule against a full cash-out refinance. Request an itemized structure for the intended occupancy and use of proceeds.

• Current first-lien balance, note and monthly statement.
• Estimated property value and any other liens.
• Requested cash amount and purpose.
• Income, assets, housing history and property documentation.