Use your property’s cash flow to fund the purchase
As your home grows in value and you pay your monthly payments, the equity in your home grows. Homeowners may want to use that equity — for repairs & renovations, life events, or to create a prudent cash reserve for the future — but don’t want to lose their original loan’s lower interest rate. A 2nd Lien Loan is a great solution, a simple way to get cash out of your home in a high-rate market.
Ark’s 2nd Lien Loan works for primary homes, second homes, and investment properties, for loans up to $500K. It’s even available for multi-family homes up to four units.
How does a second mortgage work?
A second mortgage works like any other mortgage loan. First, you submit an application for review. We will lock your rate, review important files, and hopefully close the loan.
You will then have two separate monthly payments — your old low-rate payment and the new payment. Once rates go down, you can even refinance your second loan, and with Ark’s Lifetime Guarantee, will cover loan origination fees and reimburse the cost of appraisal.
Note: your loan-to-value ratio must be less than 80:20 to be eligible for a 2nd Lien.
2nd Lien Interest Rates
Rates for a 2nd Lien Loan are slightly higher than the rates for a primary mortgage. This is because it is riskier for a lender to offer you a second loan than a primary. Mortgage rates always change, and are dependent on multiple factors, and lenders offer you a rate based on both your financial health and the current market.
While the rates for a 2nd Lien Loan may be higher than other mortgage types, it still could be a great move. For example, if you plan on using that 2nd Lien to pay off credit card debt, you can significantly reduce the interest rate you are currently paying on your credit card balances (upwards of 22% in 2023). This can lead to substantial savings in the long run.
Is it hard to get a 2nd Lien loan?
No, in fact it is often easier, although you need to have enough equity in the home to apply.
Will it affect my current interest rate?
Nope. That’s the beauty of it. If you have a low interest rate on your current mortgage, you keep it for its full term, or until you sell or refinance the home.
Can I even refi investment properties?
Yes you can. We can get you a 2nd Lien loan for rental properties from one to four units.
Pair with Other Programs
A pre-approval makes the house hunting process simpler for you. Show sellers and real estate agents you’re approved for mortgage financing.
Purchasing two or more properties? Submit all applications within 30 days and pay only a single application and commitment fee for the remaining properties.