Should You Use Specialized Second Mortgage Lenders?

Second mortgage loans are referred to as second mortgages because of the fact that the first or original mortgage takes priority if either loan is defaulted on by the homeowner. The actual definition of a second mortgage is almost identical to that of a home equity loan, in that a second mortgage is simply a second loan taken out by the homeowner against a property which is still being paid for in the original mortgage agreement. You can get a second mortgage from any bank, but there are some second mortgage lenders that specialize primarily in this type of loan.

Getting a Second Mortgage

Because of the very nature of the loan itself, the fees for closing on a second mortgage loan and the interest rates involved with these types of loans can be very high, which should cause any homeowner considering taking out a second mortgage to err on the side of caution.

• You have to remember, you're taking out another loan against your home.
  
• If you default on a second mortgage, the lender can foreclose, just as the first mortgage lender can.

As such, you want to make sure you do your research carefully and choose a lender wisely.

Specialized Second Mortgage Companies

Specialized second mortgage companies are less prevalent after the financial crisis of 2008 and 2009. It is still possible to find lenders that exclusive specialize in second mortgage, but for the most part, if you need a second mortgage on your home, you should consider first talking to the bank that issued your first mortgage and then talking to other local banks in your area. If you are turned down by most of the local banks, then you can consider opting for specialized second mortgage lenders who may be more forgiving of a less-than-perfect credit report.

Getting Help

Before you take a second mortgage loan with any lender, you should consult with an experienced attorney. Your lawyer can explain to you what your rights and obligations are with the loan you are taking and can help to make sure the terms of the loan are fair.