What is Second Mortgage
A second mortgage is a home equity loan that allows you to borrow money from the equity in your home without having to refinance your current mortgage. Equity is a defined as the difference between the appraised value of your home and the amount owed on the first mortgage. The amount that is available as loan is baed on the equity in the home.
Benefit of Second Mortgage
- Interest rates on second mortgage are lower than private loans or credit care
- Used to pay for home Improvement and other major purchases
- Mortgage can also be put toward paying college or university tuitions
Qualify for Second/Third Mortgage
You need to meet a few financial requirements. You are required to have a good credit care score, Debt-to-income ratio and decent amount of equity in your first home.
For third mortgage, you are more likely to be approved if the lender is already holding your second mortgage.