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What are Second Mortgages?

Second mortgage loans are liens held in second position and they are secured by the value of your property. Some people get a second mortgage without refinancing their existing home mortgages. The amount of equity available to you is based on the loan to value ratio, which is the value of the loan against the fair market value of your home. So a loan of $75,000 on a $100,000 home has a loan to value ratio of 75%. The standard ratio is 80%, but some lenders have loans with a loan to value of 90% or even 100%.

There are two types of these 2nd mortgage loans. You can either get a home equity line of credit or a fixed rate equity loan. A credit line operates a lot like a credit card. It has a revolving line of credit that can be paid off and used again. Equity lines of credit however, have a variable interest rate. Home equity loans on the other hand, involve getting all of your cash out at once and have a fixed mortgage rate. These work more like a standard loan. Rebecca is a free-lance writer and author of nine books. She offer more tips and advice about home equity loans and Mortgage Refinancing at the Nationwide Mortgage Loans website. Read the complete article. 

Posted in 2nd Mortgage Tips, Published Loan Articles. Tagged with , , .

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