Second Mortgage Home Equity Loan

Equity loan second –

A second mortgage can also be referred to as a home equity loan. Equity is the amount of money that is paid down on the home, or it can be the value of the home minus any loans owed on the home. There are three basic types of loans to choose from: the traditional second mortgage, a home equity loan, or a home equity line of credit. A second mortgage should not be confused with a mortgage refinance or re-mortgage. When you refinance your first mortgage you are replacing your old loan with a new loan, usually at a better interest rate. A second mortgage, or home equity loan, is another loan in addition to the primary loan, which will result in two monthly payments. It should be noted that interest rates on home equity loans are generally higher than a first mortgage, usually in the 2-4% higher range. The common reasons to get a home equity loan are to pay off high interest credit cards or other higher interest rate debts, refurbishing the home, urgent family matters such as education, medical, etc. A second mortgage puts a second charge on your home, meaning that the second mortgage provider can take a share of any proceeds if your home has to be sold. What is worse, if you pay the first mortgage but fail to pay the second, that mortgage provider can seize your home, even if the sum involved is relatively small. Getting a second mortgage home equity loan can be a good way to use the equity in your home to do any number of things