What is a second mortgage?

Get Legal Help Today

secured lock Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

A second mortgage is just that – it is an additional mortgage on a house or other property where the original mortgage is still in effect. The term “second mortgage” denotes the loan’s priority in getting paid upon default. If you fail to pay your mortgages, and your home is foreclosed upon and sold to pay off the loans, the original mortgage will be paid before the second mortgage.

When Do People Get Second Mortgages?

Many people take out a second mortgage in order to pay for big ticket expenditures that might be difficult to cover in another manner, such as with a credit card. These expenditures include a new car, home improvement projects, and college tuition. Some people also use second mortgages to consolidate debt.

Benefits of a Second Mortgage

There may be some benefits to using a second mortgage. For instance, the interest rate may be lower than the rate for personal loans or credit cards. Additionally, the second mortgage’s interest may be tax deductible. Although a second mortgage may be an easy way to borrow a large sum of money, it can be risky, since you are using your home to secure it. That means if you default on both mortgages, your house will be sold, the sale proceeds will go toward paying off your original mortgage, any money left over will not go to you but toward paying off the second mortgage, and you may be liable for any remaining balance on the second mortgage after that.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption