SECOND MORTGAGES Meaning and
Definition
-
Second mortgages are a type of loan that allows individuals to borrow money against the value of their home, which is already being used as collateral for an existing first mortgage. Often referred to as a home equity loan or a home equity line of credit (HELOC), second mortgages are an additional lien on the property and are subordinate to the first mortgage in terms of priority in case of default or foreclosure.
Second mortgages are typically taken out to access the equity built up in the property, often for purposes such as home improvements, debt consolidation, educational expenses, or other major expenditures. The amount that can be borrowed with a second mortgage is based on the difference between the current value of the property and the outstanding balance on the first mortgage.
The interest rates on second mortgages are typically higher than those of first mortgages due to the increased risk to the lending institution. Repayment terms can vary, but they often span a period of 10 to 30 years, depending on the terms agreed upon by the lender and borrower. It is important to note that failing to make payments on a second mortgage can lead to foreclosure, as the lender has the ability to seize the property, sell it, and use the proceeds to repay the outstanding loan.
Common Misspellings for SECOND MORTGAGES
- second mortgags
- aecond mortgages
- zecond mortgages
- xecond mortgages
- decond mortgages
- eecond mortgages
- wecond mortgages
- swcond mortgages
- sscond mortgages
- sdcond mortgages
- srcond mortgages
- s4cond mortgages
- s3cond mortgages
- sexond mortgages
- sevond mortgages
- sefond mortgages
- sedond mortgages
- secind mortgages
- secknd mortgages
- seclnd mortgages
Etymology of SECOND MORTGAGES
The word "second" in "second mortgages" refers to the positioning of the loan in relation to the first mortgage taken on a property.
The word "mortgage" has Latin roots and can be traced back to the Old French word "mort gage", which meant "dead pledge". "Mort" comes from the Latin noun "mors" meaning "death", and "gage" represents a "pledge" or "security".
The term "second mortgage" originated in the realm of real estate and finance. A second mortgage is a loan taken out on a property that is already mortgaged with a first mortgage. "Second" indicates that this particular loan is subordinate to the first one, meaning the second mortgage lender has a secondary claim on the property's assets in case of default or foreclosure. The phrase "second mortgage" has been in use since at least the early 19th century.
