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What is a second mortgage?
A second mortgage is a loan secured by a property that is subordinate to an existing first mortgage, meaning the first lien is paid first if the property is sold or foreclosed. Borrowers use second mortgages to access home equity without replacing their first mortgage. Common forms include home equity loans, closed-end seconds and HELOCs.
Seconds are a bigger part of broker conversations when borrowers with low-rate first mortgages want cash without refinancing. Because the second lien sits behind the first, lenders evaluate it with combined loan-to-value (CLTV) as well as the borrower's credit and income.
"Second mortgage" is the category. Specific products, such as a HELOC (a revolving line) or a closed-end second (a fixed lump sum), have their own structures and terms.
