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Second Mortgage Definition
 A second mortgage is defined as a second lien against your property that subordinates to the existing first mortgage. The second lien is loan is secured by a promissory note based on real property used as an instrument for repayment. The 2nd loan is also known as a subordinate lien and home equity loan. The second mortgage is held and recorded in 2nd position on the title of the property. Nationwide Mortgage Loans offers 2nd mortgage information, processing, interest rates and funding of second mortgage and home equity loans for all types of credit
If a borrower defaults on a second mortgage or home equity loan, the lender who holds the first mortgage is paid before the 2nd mortgage lender when the proceeds are dispersed from foreclosure. In most cases second mortgages have higher interest rates than your standard first mortgage because the default ratio is significantly higher with second mortgage liens.
Like California, the state of Maryland is imposing excessively strict predatory lending laws including the imposition of a max 7.99% annual percentage rate (APR) limit which is lower than that of other states. Maryland also has a finder's fee law that limits the fee a mortgage broker's finder's fee to 8% of the total loan amount brokered, and limits the fee on subsequent loans on the same property in a twenty-four month period to 8% of the amount by which the subsequent loan exceeds the initial loan.
Second Mortgage Loans to Consider: |
| 125% Second Mortgage |
100% Second Mortgage |
No Doc- Second Mortgage |
Getting a Second Mortgage Loan to Avoid Mortgage Insurance
If you buy a house with less than 20% down or if you haven't built up at least 20% equity before mortgage refinancing, you'll typically have to pay private mortgage insurance (PMI). This protects the lender in case you default on the mortgage loan. "A piggyback mortgage is a second mortgage that closes simultaneously with the first," explains Chris Larson, chief executive officer with E-Loan, an online provider of consumer loans based in Dublin, Calif. A piggyback mortgage is also known as an 80-10-10 loan because it involves a first mortgage for 80% of the purchase generally offered at a lower rate, a second trust loan (second mortgage) for 10% at a slightly higher rate and the remaining 10% as a down payment. |
Take a second, and consider these different second mortgage loans that offer specific benefits that may meet your qualifications for a home equity loan. Get more information and loan assistance at 1-800-242-6986.
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