Second Home Mortgage - How to get 2nd Mortgage

The home loan which is registered first is called the first home mortgage. A company may have more than one mortgage bond issue secured by the same property. The second home mortgage carries rights which are subordinate to those of the first mortgage. In the event of foreclosure, the first mortgage bondholders must be paid the full amount owed them before there can be any distribution to the second mortgage bondholders. Because of the greater risk to the lender, the interest rate on a second mortgage is higher. than first mortgage. The length of the second mortgage may be one year or may extend for as long as 20 or 25 years. You have to choose second mortgage only if interest rates drop to below the current rate. Second mortgage may be fixed or adjustable rate.

Many second mortgage companies will charge a percentage of the loan amount (Normally 6-8%) as a processing fee. If you feel the fee is too high, you can bargain. Many states limit this fee and check this limit before making second mortgage.