What is a second mortgage?


A second mortgage is a lien on the property that comes subordinate to your first mortgage. A property can have more than one mortgage on it. What a second mortgage is used for is to provide some additional funds to the homeowner when they need it.

A second mortgage can be taken as a conventional second mortgage, a home equity line or a home equity line of credit (HELOC). Home equity loans and second mortgages are essentially one and the same thing.

Second mortgages can be structured to be repaid in as short a period as a tear, or be spread over 15 years and even longer. They typically carry much higher rates than first mortgages.

A second mortgage is also called a second lien or second trust. A second mortgage lender can initiate foreclosure even if first mortgage has been paid in a timely manner. Becoming delinquent on a second mortgage with the presumption that the second lien holder cannot foreclose if the first lien obligations are met is wrong. If you are not paying your second mortgage, you could face foreclosure and possibly lose your home.

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