Terms of a Second Mortgage

Understanding Second Mortgages
Most homeowners have a first mortgage loan on their home. As you make monthly mortgage payments, the value of your home may increase, and the interest in your property, called equity, grows. Some homeowners may wish to borrow against the equity in their home to pay off credit card bills, make home improvements, or educate their children.

Second mortgages are different than first mortgage loans in many ways. They carry a higher interest rate, and usually are for a shorter term, fifteen years or less. Second mortgages help many families to move ahead in life, and they offer people room to do many things.

Traditionally, second mortgage loans are offered with a fixed loan amount and a scheduled repayment plan. A fixed rate second mortgage is a simple interest loan which is placed in second position on the property title, and does not change the terms of your existing first mortgage. A second mortgage does not require you to have equity in your home, with loans up to 125% of the value.

The interest portion of send mortgages can be tax deductible. The tax savings can be substantial when you compared to paying on other non-deductible debts. Second mortgages can save you three times more on a fixed rate, than paying debts with high compound interest rates

This article is the property of www.1st-in-homeloans.com, which has been offering home mortgage services since 2002. To find out more visit www.1st-in-homeloans.com

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