| |
| What is Second Mortgage?
Second Mortgage is a mortgage taken after the previous. The first is always the main one and the second one is the subordinate one. This mean that the lender pay back the first mortgage and only after that he can start on the second one. Now when the second mortgage is granted creditors usually consider it as a bigger risk so the interest rate is higher.
There are many reasons for a person to take out a second mortgage the most commons are, they need money to put their children through school, buying a new car, or even to pay of outstanding debts. The benefit of the last one is that you take out a big loan but the interest rate is smaller so you can pay out all our bills and debts and start paying off the current loan with a smaller interest fee. In case you happen to default on your mortgage payment then the house will be seized and sold so the first mortgage can be payed, after the first one is done then the second mortgage becomes the prime on. | | | | |
|
| |
