Broker Brief: 6 Proven Tips to Fund Your Second Mortgage

Second mortgages can deliver powerful results for your clients—but only when packaged correctly. As a commercial broker or introducer, the way you present a second mortgage opportunity plays a key role in how it’s assessed and how quickly it can be funded.

At Semper, we have over 20 years of experience in private lending. Below, we share practical guidance on what we look for—and how you can position your deals for success.

1. Understand and Explain the First Mortgage

A second mortgage is only viable if the lender is confident they can manage or take over the first position in the event of default.

Include in your submission:

• The identity of the first mortgagee (bank or private)

• Loan balance, repayment terms, and arrears history

• Any caveats, notices, or second-ranking interests on title requiring refinance

Tip: If there are signs of distress, explain them and present the strategy for resolution.

2. Tell the Story Clearly—Borrower and Purpose

Lenders are backing both the asset and the individual. We need a clear understanding of:

Key Points to Include:

• Who the borrower is and their background

• Exactly what the funds will be used for

• Why the request is commercially viable

• The timeframe and exit strategy

Tip: Avoid vague descriptions like “working capital” or “bridge loan.” Provide specifics and context.

3. Show Real Equity, Not Just LVR

Loan-to-value ratio (LVR) matters—but dollar-based equity matters more. A 75% LVR on a $20 million property is a more attractive proposition than the same LVR on a $1 million asset.

For Smaller Loan Sums:

• Apply the 3x rule of thumb: The borrower should have at least three times the second mortgage amount in net equity.

Tip: Include recent valuations and a breakdown of current encumbrances and free equity.

4. Exit Strategy Must Be Viable and Defined

Every second mortgage submission must include a clear, believable exit strategy. Whether it’s via sale or refinance, we want to see:

What to Provide:

• Supporting evidence (e.g., refinance pre-approval, property listing)

• Realistic timeframes

• Any factors that could delay or disrupt repayment

Tip: Avoid relying solely on vague intentions or overly ambitious timelines.

5. Disclose Any Risk Factors Upfront

Second mortgages come with inherent risk. We understand that—but surprises during due diligence are a major red flag.

Key Risk Factors to Disclose:

• Any existing caveats or second mortgage interests we are being asked to refinance, and why they have not met their former exit targets

• If a property is under construction, the exact stage of progress

• Any builder or supplier issues, or potential claims they may have on title

• Why the borrower is seeking funds urgently

Tip: Transparent submissions earn trust and move faster through credit assessment.

6. Submit a Professional, Comprehensive Package

The best brokers provide a complete, structured loan submission that allows fast and informed decision-making.

What to Include:

• Executive summary of the deal

• Borrower profile and background

• Details of the security property

• Current mortgage position and encumbrances

• Use of funds

• Exit strategy and supporting documentation

• Statement of position or business cash flow (where applicable)

Fast Settlements, Competitive Rates

Semper can settle second mortgages in as little as 36 hours—provided the submission is well-prepared and the transaction is viable. Our rates remain among the most competitive in the market, starting from 10% per annum.

To discuss a scenario, contact us via the Phone Number below or submit a deal or an online enquiry via our Broker Portal.