Second Mortgage
What is a Second Mortgage
Any type of property can have more than one loan borrowed against it. The original loan taken against the property is simply called a mortgage, while and additional loans secured against the property is called a second mortgage. It is possible to register a third or fourth mortgage against a property, but it is rare.
Why a Second Mortgage?
Second mortgages are taken against a propert for several possible reasons, such as financing home improvements, college tuition fees, debt consolidation or a variety of other expenses. If over time, you have gathered enough equity in your home, another possible option is to refinance your home and borrow money in greater than your mortgage balance. Usually, a second mortgage carries a higher rate of interest than a first mortgage. So if interest rates are low or start decreasing, refinancing becomes a more appropriate option.
