Second Mortgage – What Is It & How You Can Get One

If you have financing on your house, you probably have some idea about the equity you hold in your place. It means you own that much of the house that you have paid the installments. This is where another mortgage comes into the picture – Second Mortgage.

You can obtain that loan on the value of the house that you own. The funds obtained through this channel can be used for renovation, other debt payments, and so on. If you would not be able to pay off this debt, you will end up losing ownership of your house. There are companies that offer hard money second mortgages in San Antonio TX if you are looking for one.

What Is It?

Essentially, when you obtain a second mortgage, you sell your equity of the house to the lender against cash. In turn, this cash can be used for a number of purposes, including college tuition, home renovation, vacations, etc.

Keep in mind that it is a debt and you need to pay it.

Types Of Second Mortgages

In broad terms, there are two types of second mortgages:

  • Home Equity Loans
  • Home Equity Line of Credit (HELOC)

Home Equity Loans – In this loan, the lender gives you cash against your equity and you need to pay it back in monthly installments. The interest rate is fixed so there are no chances of monthly payments going up.

Home Equity Line of Credit (HELOC) – It is a new type of credit borrowing line where you can get a loan as much as you need based on the value of your ownership. You do not get all of your equity’s worth, as opposed to HEL, and you need to pay back what you borrow plus the interest, but there is a catch. You have a time window that you need to mind or otherwise, you will end up losing your house.

How You Can Get One

If you are seriously looking, you will find plenty of private second mortgage lenders in San Antonio TX that can help you out. All you need to have is equity!

Second mortgages are risky for lenders because the first lender owns the right to the house and the second lender will get only what is left after the first one.

Here are somethings that you need to know to get a second one:

Strong Credit

In order to pursue the second lender, you need to show that you are fairly treating your first one. This shows that you are consistent in payments and serious about your financial obligations. Otherwise, your application will not be considered.


You can get a rough idea about the equity by comparing the payments you have made against the market value of the house. But the second lender can get your house appraised and get another market value price.


Lenders need to know you do not have long outstanding obligations so that they can get their money back. So, the same way you secured your first loan, you need to show tax returns, pay stubs, etc., to convince the lenders.

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