You know that investing in private mortgages is a great way to make profit, and get even bigger returns than you would were you to invest in private first mortgages only. But the problem some investors find when looking for second mortgages is that there simply aren’t enough out there. Homeowners who already have a first mortgage often already have a good relationship with their bank, and the equity needed to apply for that second home loan. So how do investors who want these types of mortgages find them?
A mortgage broker will always be your best bet when looking to invest in second mortgages. While you may think that anyone with a mortgage can somewhat easily obtain a second mortgage from their bank, this isn’t actually true. Many homeowners don’t have the equity needed to obtain a traditional second home loan; and some don’t have the credit needed – something needed, although a requirement that’s all too often forgotten about. When these unqualified borrowers are in need of a second mortgage, a mortgage broker is often the first person they turn to.
Mortgage brokers come into contact with homeowners in need of a second mortgage every day. Maybe even more importantly, they come into contact with unqualified borrowers every single day. They want to help these homeowners, but they can’t do it unless they have a vast network of private investors willing to put up the funds for the second mortgage. When you contact a mortgage broker and begin a relationship with them, you may just be the first person they call when a borrower needs a private second mortgage.
You could also try the local registry office in your area. They should have records on every property, and mortgages attached to them. Asking about these might give you an idea as to who’s looking for a second mortgage, but typically these records don’t include any needs of the homeowner, just the loans that they currently have. It’s for this reason that taking the time to head down to the registry office may not yield you the results you’re looking for, as visiting a mortgage broker’s office would.
Of course you could also go the traditional route and simply place an ad in your local newspaper. You may have seen these already, investors advertising “We Buy Second Mortgages,” or “Homeowner in need of a Second Mortgage? We can Help!” But you should be wary of these ads, because homeowners certainly are. They just expect that a savvy, and reputable investor would have other more professional venues to take when looking to invest in second mortgages and truthfully, they should.
Turning to a mortgage broker really is your best bet when looking to invest in second mortgages. While you may think this idea is unoriginal, those looking for second mortgages to borrow aren’t looking for the most creative investors. They want professionals who will provide them with a secure mortgage and who will be able to provide the funds needed for those second mortgages. Typically they’ll turn to a mortgage broker to find this individual, which means that you probably should too.