Article: Understanding A Second Mortgage
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Understanding A Second Mortgage
A Second Mortgage is a Property Lien placed behind a First Mortgage
A second mortgage is a loan that you take against the equity that you have already built into your home by paying off some of the principal balance on your first mortgage loan.
Historically the total amount of debt from the first and second mortgage combined could not be more than 80% of the total market value of the home. However, record low interest rates and a competitive lenders marketplace have created a lending environment where some lenders are approving second mortgages that, when combined with first mortgage balance, is totaling as high as 130% of the home value.
However, financial advisors will tell you that carrying that much debt on your home is never a good idea.
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