Question:

Why are 2nd home mortgage rates higher than 1st mortgage rates?

Answer:

2nd home mortgage rates are considered only an aspect of your decision to get a second mortgage. 2nd home mortgages are used for a variety of purposes such as debt consolidation, avoiding mortgage insurance or freeing additional cash to use on different items. Whatever you are going to use the cash on, make sure you are not exhausting you equity for no good reason.

Since second mortgages come as a second lien on your property, they are considered riskier to the lender - a second lien holder may never get their money back if the first mortgage lender forecloses and the highest bid barely satisfies the first mortgage amount.

Therefore, 2nd home mortgage rates will be higher no matter if you are using a traditional second mortgage or a home equity line. If a 2nd home mortgage is taken exceeding the equity on the house, 2nd mortgage rates will be even higher.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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