| Second Mortgage | |
| A secured mortgage that is subordinate to another mortgage against the same property, basically, the second loan in sequence. A property can have multiple loans against it, but the numbers usually don’t exceed 2-3. The loan which is registered first is called the first mortgage and thus, the loan registered second is called the second mortgage. | |
| Home Equity Loan | |
| Home equity loans are most commonly second mortgages, but although rarely, are also sometimes first mortgage. Home equity loans are usually referred to as second mortgages, basically because they are secured against the value of the property. Home equity loans and home equity credit lines are usually, but not always, for a shorter term than first mortgages. | |
Because the terminology can get quite confusing, especially if you are new to the mortgage business, having a loan officer help you along the way can save you a great deal of time and money. A second mortgage is any loan that is a second lien on the property, sometimes for a set dollar amount, to be paid out all at one time. Second mortgages are available as either a fixed rate second mortgage or an adjustable rate second mortgage, depending on what your finances are, either option may have its advantages. With a home equity loan, the loan is borrowed against the equity of your home, and is considered a secured debt. As a secured loan, the interest rates will be a bit lower than that of an unsecured loan. Depending on what you intend to use the money for, either option may be advantageous.
Which is better for me?
With home owners looking to spend money over a set period of time, such as making home improvements one after another, or paying tuition, a home equity line of credit is best. Second mortgages are best when you need all of the funds at one time. Also, with a second mortgage, you can choose between a fixed rate and an adjustable rate as previously mention, whereas with a home equity loan, you can only go with an adjustable rate loan. For the most accurate advice, it is suggested to call us and speak to one of our loan officers as they can determine which is best for your financial situation.
For over 20 years, East West Mortgage has been helping home owners get the best deals on their home loans. As one of the largest mortgage brokerages in the nation, we understand that it takes quality service as well as low rates to ensure the satisfaction of our clients, and we do the best we can to provide that service. For more information on a second mortgage and home equity loans, feel free to call us today!
