What is a second mortgage and is there a ststue of limitations on a lien?

Answer

You can have more than one mortgage on a property. The second mortgage will always be smaller, and will depend on the equity you have in the property. (Equity is the difference between what the house is worth and what you still owe on it, ie. the first mortgage.)

People typically get them to do home improvements or pay off credit card debt.

Answer

The second mortgage also refers to the position on the lien.

Lenders who are in the first position have the primary lien against the property. They would be able to foreclose on the property should a borrower default because of their primary lien position. The second lien position relates to the amount of money loaned and that second position. A secondary lien holder would find much more difficulty foreclosing on the property. This is why second mortgage interest rates are typically much higher than first mortgage rates, to compensate for the higher risk.

Think of this in terms of other liens against property. For consumers who have money problems, get sued and have judgments issued against them; there can be a number of lien against their property. The position would depend on the time frame and amount of money owed.

All liens (which is what a mortgage is) encumber title and can prevent sale of the property.

First answer by Tina. Last edit by Tina. Contributor trust: 1947 [recommend contributor]. Question popularity: 161 [recommend question]