second mortgage

noun

Definition of second mortgage

: a mortgage the lien of which is subordinate to that of a first mortgage

Examples of second mortgage in a Sentence

Recent Examples on the Web

Larson, a multi-media artist and fifth-generation East-Sider, and Zulkosky, a registered nurse, took out a second mortgage on their home and bought a former linoleum store on Payne Avenue for $50,000. — Frederick Melo, Twin Cities, "Husband-and-wife studio owners call St. Paul’s Payne Avenue, East Side the next arts hub," 6 Sep. 2019 The Wildes have taken out a second mortgage to repay their credit cards, according to their lawyer Mr. Silver. — Dave Michaels, WSJ, "Crypto Craze Drew Them In; Fraud, in Many Cases, Emptied Their Pockets," 26 Dec. 2018 Family and friends provided the initial funding, and Mr. Scaringe and his father both took out second mortgages to raise money. — Nelson D. Schwartz, New York Times, "Meet the Man Quietly Building the Tesla of Trucks, With Jeff Bezos Aboard," 2 July 2019 The firm noticed that panicked investors were dumping bonds packed with second mortgages. — Ryan Dezember, WSJ, "A Hedge Fund Makes Billions Off Americans’ Underwater Mortgages," 25 Dec. 2018 Today's credit scores, by contrast, according to Amy Crews Cutts, chief economist for Equifax, are high: A median 770 Vantage score for HELOCs and 713 for home equity loans or second mortgages. — Kenneth R. Harney, courant.com, "Booming Home Equity: Financial Opportunity Or Warning Sign?," 28 June 2018 Irish fans had taken out credit-union loans or second mortgages just to get here. — Mike Jensen, Philly.com, "The World Cup is coming, and memories from '94 flood back," 13 June 2018 Recruit teachers through incentives such as soft second mortgages and discounts at local businesses. — Richard A. Webster, NOLA.com, "New Orleans must do better for poor and seniors, Cantrell's transition group says," 4 May 2018 Mortgage interest deduction: The House caps it at $500,000 for new mortgages and eliminates it for second mortgages. — Phil Mattingly, CNN, "GOP tax negotiators -- slowly but surely -- hammering out final bill details," 11 Dec. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'second mortgage.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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12 Sep 2019

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The first known use of second mortgage was in 1912

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More Definitions for second mortgage

second mortgage

noun

Financial Definition of second mortgage

What It Is

Also called a home equity loan, a second mortgage is secured by the equity in a house. Equity equals the value of the house less the balance owed on the homeowner's mortgage.

Second mortgages are not the same as home equity lines of credit (HELOCs).

How It Works

Second mortgages are similar in concept to traditional mortgages. For example, second mortgages generally must be repaid over a fixed period. Some lenders may offer fixed rates on these loans; others might offer variable rates.

Like first mortgages, most banks will also charge points and other fees for generating the second mortgage (attorney fees, title fees, insurance and documentation fees, for example), and these costs vary by bank. In some cases, the lender might charge a fee if the borrower prepays the loan. And because the loan is secured by a house, if the borrower defaults, the lender may foreclose on the house.

Why It Matters

Second mortgages can be viable options when compared to credit cards or other high-interest, unsecured loans. In addition, mortgage interest is tax-deductible, making the interest rates on second mortgages sometimes lower than they appear when one considers the tax savings.

However, not all second mortgages are created equally. Borrowers are well served to compare fees, interest rates, and repayment terms among lenders. After all, when a borrower defaults, his or her home could very well end up belonging to the bank for good.

Source: Investing Answers

second mortgage