mortgage

What is second mortgage?

 

What is a second mortgage?

The Bankrate.com financial term of the day is: "second mortgage."

When you're paying a mortgage and have built up equity in your home, you can borrow against that value with what's called a second mortgage. If an owner defaults and the home has to be sold, the second mortgage takes a back seat and doesn't receive any of the proceeds until the original mortgage -- the "first mortgage" -- has been satisfied.

A second mortgage allows you to go back to the well and borrow again by tapping into your equity when you're already paying on a home loan.

To compare home loans, visit the Mortgage section at Bankrate.com.

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