MORTGAGE

There are situations where it is possible to obtain mortgage financing when there is already as existing mortgage associated with the property. 

This is often accomplished by basing the amount of this second mortgage on the equity that the owner has built up in the property, although there are other formulas used in different places around the world. It is also not unusual for real estate laws to require that the holder of the first mortgage agree to the creation of a second mortgage.

As with most types of loans, mortgage financing involves the full repayment of the amount borrowed to acquire the property, plus applicable interest that is applied according to terms outlined in the mortgage agreement. 

The interest rate may be fixed, meaning it remains the same for the duration of the contract. However, it is also possible to obtain mortgage financing that carries a variable rate of interest. This allows the homeowner to take advantage of any decreases in property interest rates that may take place during the life of the mortgage.

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