What Is a Second Mortgage?
A second mortgage—such as a Home Equity Line of Credit (HELOC) or a Home Equity Loan—allows you to borrow against the equity you've built in your home without touching your existing first mortgage.
If you secured a historic low rate on your first mortgage years ago, a cash-out refinance would force you to give up that rate on your entire balance. A second mortgage solves this by leaving your first loan intact and only charging current market rates on the new money you borrow.
Common Uses
- Home improvements and renovations
- Debt consolidation (paying off high-interest credit cards)
- Down payments for investment properties or second homes
- Funding college tuition or major expenses
Two Main Options
Home Equity Loan
A lump sum of cash with a fixed interest rate and fixed monthly payments over a set term.
HELOC
A revolving line of credit (like a credit card) with variable rates. Borrow only what you need, when you need it.
Key Benefits
Preserve Your Rate
Keep the low rate you locked in years ago on your primary mortgage.
Lower Interest
Rates are significantly lower than personal loans or credit cards because it's secured by your home.
Potential Tax Benefits
If the funds are used to substantially improve the home, the interest may be tax-deductible.
Fast Funding
Second mortgages typically close faster than primary mortgages.