A second mortgage is a loan secured by a home that sits behind the first mortgage in lien priority.
A second mortgage is a loan secured by a home that sits behind the first mortgage in lien priority.
Second mortgage matters because homeowners can borrow against equity without replacing the original first mortgage. That makes it a different strategic choice from refinancing.
It also matters because lien priority affects risk. A second mortgage usually carries different pricing and underwriting considerations than the first lien because it stands behind the primary mortgage claim.
Borrowers encounter second mortgages after they already own the home and want to borrow against equity while leaving the first mortgage in place.
The concept becomes practical when comparing home-equity products with refinancing alternatives.
A homeowner wants to access equity but keep the attractive rate on the existing first mortgage. The homeowner takes a separate loan secured by the property behind that first lien. That new loan is a second mortgage.
Second mortgage differs from a Cash-Out Refinance because a cash-out refinance replaces the existing first mortgage, while a second mortgage adds a separate loan behind it.
It also differs from Home Equity Line of Credit (HELOC) because HELOC describes a revolving second-lien product, while second mortgage is the broader structural category. A Piggyback Loan is one common purchase-time use of the broader second-mortgage structure.