The Definition of the Second Mortgage

 The Definition of the Second Mortgage
        Hi Guys It's me Onesiphoro Writer and Researcher of Onesiphoro. blogger.com In this
blog I will explain to you what is the Definition of the Second Mortgage.

          Bank he re's the latest installment in our educational series on home equity borrowing today I'm going to talk about the term second mortgage it's a term that's relatively self-explanatory but it's
one that's often open to misinterpretation and it's one you're definitely gonna want to hear as you're applying for a home equity loan or line of credit so we want to take the opportunity to bring some clarity to that term today a lot of people think a mortgage is a loan that used to purchase your home by definition it's actually a bit broader than that it really is any a loan that is secured by property or real estate whether it's used to purchase a  home or not so because a home equity loan or line of credit is secured by your home that does, in fact, make it a mortgage in order to secure a loan with real estate a liner will place what's called a lien on a property and in the simplest definition alien is really a right to keep possession so to give an example of what that is exactly when you take out a loan to buy a home the bank really still maintains possession of the home you're living there you make the payments every month but if you stop.

                     making those payments the bank is saying hey I'm out of money here I still need to get paid and what they can do is is is foreclose on the home and sell it and the lien then says hey when we've sold this loan that guarantees we get paid pack the money we're still owed so the lender that is in the first lien the position is usually taking on the most risk it's the largest loan like loans to purchase homes typically are so they'll be in the first position any other loans secured by the property secured by the home they're gonna be put in what's called the second lien position meaning after the sale of the home after the first lien holder gets paid then they get paid with what's next so typically those types of loans are going to be home equity loans home equity line of credits and that's why you hear the terminology the second mortgage applied to them now. Does home equity you always have to be a second mortgage and the answer is no because if the homes owned free or clear in other words, there's nothing left on the loan that was used to purchase it or somebody used cash to buy the home there's no loan so the home equity line or loan would then be placed in the position, so you can't have home equity that is actually the first mortgage hopefully, this all makes sense That's it for today guys hopefully this give you the idea about the definition of the second mortgage.