SECOND MORTGAGE Meaning and
Definition
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A second mortgage, also known as a home equity loan, is a financial arrangement where a borrower obtains a loan using their property as collateral, in addition to the first mortgage they already have on the same property. This form of lending is commonly used by homeowners who have sufficient equity built up in their homes and wish to access additional funds for various purposes.
In a second mortgage, the borrower receives a lump sum of money from a lender, typically a bank or a financial institution, in exchange for a subordinate lien on the property. The second mortgage is secondary to the first mortgage, meaning that in the event of default and foreclosure, the first mortgage lender is paid back before the second mortgage lender. This structure increases the risk for the second mortgage lender as they have a lower priority in the event of a property sale.
Second mortgages are often used to fund home improvement projects, debt consolidation, education expenses, or other major expenses. The loan amount is based on the available equity in the property, which is the difference between the current market value of the property and the outstanding balance on the first mortgage.
Interest rates on second mortgages are typically higher than those of first mortgages due to the increased risk for the lender. However, the interest paid on a second mortgage may be tax-deductible in certain circumstances, making it an attractive option for borrowers. It is important to carefully consider the terms, interest rates, and repayment schedule before securing a second mortgage, as failure to repay the loan could result in foreclosure and loss of the property.
Common Misspellings for SECOND MORTGAGE
- aecond mortgage
- zecond mortgage
- xecond mortgage
- decond mortgage
- eecond mortgage
- wecond mortgage
- swcond mortgage
- sscond mortgage
- sdcond mortgage
- srcond mortgage
- s4cond mortgage
- s3cond mortgage
- sexond mortgage
- sevond mortgage
- sefond mortgage
- sedond mortgage
- secind mortgage
- secknd mortgage
- seclnd mortgage
Etymology of SECOND MORTGAGE
The word "second mortgage" is derived from two components: "second" and "mortgage".
The term "mortgage" has its origins in Old French, specifically the words "mort" (meaning "dead") and "gage" (meaning "pledge"). In medieval times, the term referred to the pledge of property or land as collateral for a loan, which would become void upon repayment.
The word "second" derives from the Latin word "secundus", meaning "following" or "next". It signifies something that comes after the first or precedes the third. In the context of a mortgage, a "second mortgage" refers to a loan taken out on a property that already has an existing mortgage.
Therefore, the term "second mortgage" combines these two roots to describe a subsequent loan that is secured by the same property as an existing mortgage.
Similar spelling words for SECOND MORTGAGE
- second nature,
- second moment,
- second person,
- second estate,
- second world war,
- second-string,
- second sacker,
- Second Empire,
- second power,
- second banana,
- second-rater,
- second growth,
- second coming,
- second period,
- second joint,
- second-hand store,
- second sight,
- MORTGAGE SECOND,
- second advent.
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