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edwards301 · Joined: 28 Sep 2008 Posts: 1 1.28 Dollars($)

second mortgage question

smithsussane · Posted: Sun Sep 28, 2008 8:42 pm Post subject:

Hi edwards!

Welcome to Forums!

While taking a second mortgage, you can use the home equity as a collateral. But the second mortgage is always given less priority and in case you default on paying the loans, you will have pay off the previous loan first and then clear the second one.

Feel free to ask if you have further queries.

Sussane

Guest

As far as my knowledge, home equity is a collateral against which you can take a second mortgage.

gmakerley · Posted: Mon Sep 29, 2008 11:34 am Post subject:

to directly answer your question: a second mortgage is a loan on which a lien is placed on your property. this loan/lien would be secondary in nature to your original mortgage. the amount of the second mortgage is something you would negotiate with a lender, based on the value of your home, the amount of your existing mortgage, and your current debt load and credit standing.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

gmakerly is correct. A second mortgage is just another mortgage in addition to the first one. They will still only lend a percentage of what the home is worth. With good credit, there are still many lenders and banks that will lend up to 90% of home value. You have to then subtract the amount of the first mortgage to calculate how much you could qualify for.

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is a second mortgage the amount of equity in your home?