Definition of second mortgage
: a mortgage the lien of which is subordinate to that of a first mortgage
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Recent Examples of second mortgage from the Web
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Recruit teachers through incentives such as soft second mortgages and discounts at local businesses.
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Mortgage interest deduction: The House caps it at $500,000 for new mortgages and eliminates it for second mortgages.
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That’s like a credit card on steroids, a second mortgage.
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One prominent securities regulator warned that people were now taking out second mortgages on their homes to buy bitcoin.
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The process effectively involves two loans — one to cover the purchase of a home, and a second mortgage that effectively covers the renovation work.
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The second mortgage is forgiven for most buyers if the owner stays in the home for at least three years.
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Dening had made the young golfer's dream possible, steering him away from trouble in his teenage years and taking out a second mortgage on their house in Queensland to fund his place at a prestigious school.
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The board backed up its promise with a second mortgage on the charity's historic building.
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.
First Known Use of second mortgage
1912
Financial Definition of SECOND MORTGAGE
second mortgage
What It Is
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
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