Second Mortgage, Home
Equity Loan
A secured loan (mortgage) that is subordinate to another loan against the same property. More specifically, the second loan in sequence.
Generally, second mortgage hass a higher interest rate and with shorter terms than a "first" mortgage. If the borrower defaults and the property is sold, the second mortgage is paid after the first.
Also called Home Equity Loan. A home
equity loan is borrowing against the equity you have acquired in your home.
Lets
suppose your original mortgage was $175,000.00, but your house is worth
$225,000.00. The difference is $50,000.00. This $50,000.00 is the equity
you have in your home. This is the portion you can borrow either in the
form of a lump sum (if so it will be home equity loan or second mortgage), or in the form of a line
of credit.
Home
equity loans are used for all kinds of things. Such as, home
improvement, college tuition, new cars, family vacations, etc.
Refinancing
Securing
the Best Mortgage Rate
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