second mortgage

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 Refinancing occurs for reasons besides lower rates, including removal of mortgage insurance, pulling cash out for home improvements, debt consolidation and combining a first and second mortgage. — Washington Post, "What to know before refinancing your home loan," 17 Sep. 2019 The same thinking held sway with millions of other Americans who had both first and second mortgages. — Ryan Dezember, WSJ, "A Hedge Fund Makes Billions Off Americans’ Underwater Mortgages," 25 Dec. 2018 Cue the Schitts, who swoop in and purchase the motel by taking out a second mortgage on their home. — Nick Romano, EW.com, "Schitt's Creek star Dustin Milligan on Ted's return," 22 Jan. 2020 The downside includes having to secure a second mortgage to obtain LPs that barely made it to the thrift-store dollar bins a decade earlier. — Jim Allen, Popular Mechanics, "The Best Turntables at Any Price You Can Buy Right Now," 30 Dec. 2019 The composer has to take a second mortgage on his house. — Washington Post, "Why exactly did so many people like ‘Cats’ in the first place?," 20 Dec. 2019 No one wanted to finance the project: the show’s producer, Cameron Mackintosh, had to solicit small-fry investors through newspaper ads; Lloyd Webber took out a second mortgage to make up the ultimate shortfall. — Jia Tolentino, The New Yorker, "The Improbable Insanity of “Cats”," 16 Dec. 2019 Robertson and his wife, Susan, took out a second mortgage on the property in 2014 in the amount of $1.2 million, according to the lawsuit. — Bill Bowden, Arkansas Online, "Theme park owner out, bless his heart," 8 Dec. 2019 Moreover, a new set of companies, Oculus (now part of Facebook), HTC and Sony, have come up with products that do not require a second mortgage to afford. — The Economist, "Virtual reality continues to make people sick," 23 Nov. 2019

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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Last Updated

12 Mar 2020

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“Second mortgage.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/second%20mortgage. Accessed 29 Mar. 2020.

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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