Second mortgage

 

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Second Mortgage

A mortgage which ranks after a first mortgage in priority. Properties may have two, three, or more Mortgages, deeds of trust, or land contracts, as liens at the same time. Legal priority would determine whether they are called a first, second, third, etc. lien.

Second mortgage

The taking out of a mortgage on a property which is already mortgaged. This can be used to raise capital if the property has significantly increased in value and would involve finance companies rather than banks or building societies. Since the first mortgagee (lender) usually holds the deeds of the property, the second mortgagee will carry a higher risk and thus charges a considerably higher rate of interest.



Similar Matches

Interest only mortgage

Interest only mortgage

A mortgage where regular payments (usually monthly) only meet the interest requirements. The interest rate is usually variable and linked to prevailing rates but can be fixed for a given period. The capital amount outstanding remains approximately the same and the borrower will need to make additional provision for repaying this amount at the end of the term of the loan.


Mortgage Insurance

Mortgage Insurance

Insurance written by a private mortgage insurance company (referred to as an 'PIC') protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sale price. The Federal Government writes this form of insurance through the FHA and the VA.


Self certification mortgage

Self certification mortgage

Mainly for people whose income is difficult to assess using the standard method adopted by most conventional mortgage lenders. Bonuses, commission and seasonal work can cause income to vary over time or be difficult to guarantee and this may not be considered acceptable in order to get a loan. The main groups of people that opt for self-certification mortgages are: Self-employed and unsalaried company directors, contract workers (increasingly common in technology-based industries), commission-based workers (often in sales, recruitment etc.), people with seasonal earnings. The interest rate you are charged will be higher to compensate the lender for the increased risk.


Mortgage incentives

Mortgage incentives

The lender may offer a discount or fee-free period on buildings insurance, accident and sickness insurance, redundancy insurance, or payment protection insurance. This is often done to encourage you to take up the policy, which you are then fairly likely to keep in the longer term. Other common incentives include a free valuation and money towards solicitor's fees.


Mortgage pipeline risk

Mortgage pipeline risk

The risk associated with taking applications from prospective mortgage borrowers who may opt to decline to accept a quoted mortgage rate within a certain grace period.


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