Second Mortgage

Second mortgage is an amazing option for the people who could not make is through the first or the original mortgage. It is a subordinate mortgage made while the original mortgage is still in effect. Like original mortgage, the second mortgage is also secured by your home, that means if you could not pay off the loan amount then the bank will take your home. In case, if you default on your home loan payments, then first the original loan will be paid off by the sale of property and the amount on second mortgage is recovered.

Second mortgages are mostly equipped for making home improvements and for paying off large debts. It is secured on your home which means you will lose your home if you failed to repay the loan amount. The second mortgage would receive repayments only when the first mortgage has been paid off. Also, the interest rate charged for the second mortgage tends to be higher and the amount borrowed will be lower than for the first mortgage.

There are two main types of second mortgages - home equity loans and home equity lines of credit. Home equity loan are the ones where the lender gives you the whole lump sum amount of the mortgage at once and you are allowed to repay it at regular intervals over the specified period of time. Interest rates in home equity loan are mostly fixed. On the other hand, home equity line of credit works like a credit card according to which, you are allowed to spend the money as per your requirement and the interest rates are typically adjustable.

Talking about second mortgages,you can the same from any lender and not majorly from the lender of the original mortgage. You can get it from any lender. However, what is important is to know about the different quotes which include the interest rates and total fees in order to compare and choose the one that suits the best with your requirements.