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Is it the right option to take a second mortgage when there is already a negative amortization 90% CLTV on a 4 unit property? Property is in california

Guest

If there is mortgage with negative amortization then taking out a second mortgage will be lot of financial strain for you. If there is not going to be a very substantial increase in your income then you may face problems in future with continuing both the mortgages.

Lemmerz

ckalvesmaki · Posted: Tue May 01, 2007 3:38 pm Post subject:

The answer is yes and no......yes you can take out a second behind a neg am first however the lender is going to gross up your current first mortgage by the maximum of your neg am........in other words if your max neg am is 110% of your starting note then you are allready at a 100% loan to value so the answer would be no because you don't have any equity.

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

Hi Guest,

You must be making minimum payments which are not sufficient to cover the dues each month and thus balance over the minimum payment amount is getting added to your mortgage balance, resulting in negative amortization.

Cedric, explained from equity point, now other thing is will you be able to afford making 2 payments when you are making just minimum payments on this first mortgage? Plus, the rate on the 2nd mortgage will be somewhat higher. So you will have an increase in total monthly payment burden.

Miller

Samantha

Hi guest,

It is really difficult to get a second mortgage if there is already a negative amortization first loan on your property. Negative amortization makes you lose your equity by increasing your loan balance. Now, if you need to get a second loan, there should be some equity at least. So, here the deciding factor as to whether you can get a second home loan on such a property would be how much equity you have in it.

Hope this helps..

God bless you.

Samantha

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California second mortgage inspite of negative amortization

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