Second Mortgage

Quick Summary

A mortgage registered behind an existing first mortgage.

ELI5 Explanation

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It is an extra loan secured by your home after the main mortgage.

Detailed Explanation

Second-position loans carry higher risk for lenders, usually leading to higher rates. They are often used for consolidation, tax arrears, or short-term liquidity.

Example

Borrower keeps first mortgage intact and adds a second mortgage to access equity.

Why It Matters

Priority ranking affects pricing and default outcomes.