Second mortgage loans made for Melbourne
Specialised Second Mortgage Loans For Business
Getting a private second mortgage loan with Royce Stone Capital will ensure three things. Firstly, you'll get a tailored second mortgage loan made for your specific situation, on terms that suit you! Secondly, you'll have funds delivered to you urgently, using our unique methodology that gets rid of the red tape! Thirdly you'll have certainty of funding because of the wholesale capital (family offices and HNW investors) we work with. We will provide you with the certainty you deserve and the urgency you require.
- Settlement within 7 business days
- Loans up to $5M
- Low market rates
- Interest only loans or capitalised interest
- Higher LVRs than most second mortgage & caveat lenders.
- Accept various forms of property security.
For a confidential discussion, so you can thrive contact us here.
Non bank urgent funding, second mortgage loans
When To Use A Second Mortgage Loan
Second mortgage private loan serve as an optimal solution for short term loans. These loans are designed to provide immediate capital injections for urgent situations. Be free from the constraints of traditional banking and the requirements of having to refinance a first mortgage to get access to greater amounts of equity. Examples of when to use a second mortgage loan are:
- The cost of a short term second mortgage combined with a first mortgage bank loan is cheaper than refinancing with a private first mortgage loan.
- The inconvenience solved or the return on funds of the second mortgage loan is greater than the cost.
- The bank is reluctant to give you extra funds and expand current facilities, or not in a timely fashion that meets your requirements.
- When you want a capital partner that will back you and give you capital certainty.
Work with us, if you want a coaligned capital partner to help you get ahead!
How to get a second mortgage loan
Application Process For Your Second Mortgage Loan
At Royce Stone Capital because of the family offices, wholesale funds and our own funds that we use, we have a unique methodology of providing second mortgage loans that keeps the process simple. Our initial DD is comprised of the below.
- Our partners conduct an internal valuation (9 times out of 10, external valuations aren't required, thus saving you time and money.
- We require a borrowing entity usually a company or trust.
- We require the first mortgage statement and loan document.
- We require a copy of your ID.
- We require an exit plan (how you will repay the funds) and what the funds will be used for.
- We don’t require a deed of priority as most other lenders do, saving you time and money.
The benefits of a second mortgage loan
Advantages of Second Mortgage Finance With Royce Stone Capital
Getting a second mortgage private finance solution with Royce Stone capital, means you get the flexibility and urgent funds you require to succeed. Whether it is for a business cashflow, refinance, investment or property development purposes, you can move forward with confidence.
- Use funds to get you out of cashflow problems.
- Use the funds to invest into a business opportunity.
- Cross collateralise your security, to release equity and do property development or renovations for commercial reasons.
- You'll have a capital partners that will want you to win, and have access to an exclusive network of family offices and HNW investors.
Work with us today, if you want capital partners that understand you!
Why can't banks offer a second mortgage?
Banks rarely do second mortgage loans, and this is in a large part due to the risk profile they are willing to take on. Secondly, most borrowers that require a second mortgage loan, usually don't meet bank serviceability requirements, or the bank is unable to provide funding on time.
Unfortunately, when businesses need funding the most and are in critical situations, banks more often than not, will not be there to help, as a the client doesn't meet their serviceability requirements.
Banks in certain instances can provide a second mortgage, and typically it is in the form of a cross collateralised loan. This is where they take equity out of one asset and use it as an equity contribution towards the purchase of another asset, then take both assets as security.
How much can you borrow with a second mortgage?
This largely depends on the equity available in your property that you are using as security. As a rule of thumb, the combined first mortgage and second mortgage including fees, cannot go above 80%LVR of the property value.
For example, if you have a property worth $1M, a bank loan of $500k. The second mortgage cannot be more than $300k including fees. As the total LVR would be 80% with the two facilities combined.
The reason lenders only go up to 80% combined, is this reduces the risk exposure for them leaving a 20% buffer should the borrower go into default, or if property prices were to drop in value.
What is the eligibility criteria for a second mortgage?
For a private second mortgage loan you must be borrowing for business or investment purposes only. This means you will be required to have a business entity or trust that is the borrowing entity. You must also have a property with sufficient equity for the required borrowing amount, and an exit strategy that aims to repay the loan within 18 months (max loan term is 18 months).
Typically on maturity most borrowers will refinance the second mortgage loan with a combined first mortgage with a bank when their situation improves, or will sell the asset / project that the funds were used for.
What are my alternatives to a second mortgage loan?
This largely depends on how much money you need, and what other assets you may have. We are one of the few to do heritage plate lending, and lending against alternative assets.
However, if property is the only asset you wish to borrow against, then an alternative strategy to getting a second mortgage loan may be to refinance the first mortgage and second mortgage component together, as one private first mortgage loan.
For longer term loans and larger quantum’s this is often a better solution.
A calculation should be done, as to which scenario is better for you.
