The Basics of a Second Mortgage

A second mortgage does not require you to have equity in your home. New loans are available up to 125% of value. Common uses for a loan include paying off bills, making home improvements, or taking personal cash out.

A second mortgage may also be known by other names like, home equity loan, equity line of credit, home improvement loan, or consolidation loan.

Second mortgages are simple interest loans which are placed in second position on the property title, and does not change the terms of your existing first mortgage. The interest rate is fixed, unless it is a line of credit.

A new loan can be a good source of funds to eliminate bills and reduce your monthly payments. It's estimated that you can save three times more on a fixed rate, simple interest second mortgage, rather than continuing to pay on high rate credit cards with compounded interest.

The interest portion of your second mortgage payments may be tax deductible up to the value of your home. The savings can be substantial when compared to payments on loans that have zero tax benefits.

Using home equity as a supplement for income. Some information for those faced with the need to use their home equity for personal cash out.

Using your home equity for home improvement. Which loan type is best for improvements, home equity loan, second mortgage, or a credit line?

Choosing a home equity loan or a credit line. Compare the differences between a home equity loan and a home equity credit line.

What lenders look for in a mortgage application. Guidelines that lenders use to qualify applications for new home loans and home equity loans.