What is a Second Mortgage?
A second mortgage is a loan taken out against a property that already has an existing mortgage. It is also commonly referred to as a "home equity loan."
Second mortgages are popular for financing major home improvements, debt consolidation, or other large expenses because they typically offer lower interest rates than personal loans or credit cards.
Key Considerations
The amount you can borrow is usually limited by the value of your home and your creditworthiness. Most lenders allow for a maximum combined loan-to-value (CLTV) ratio of 80% to 90%.
It is important to remember that your home is used as collateral for the loan. If you fail to make your payments, the lender can foreclose on your property.