What is a Second Mortgage?
Option One Mortgage believes that consumers in the market
for a second mortgage loan should educate themselves about
what is involved before making a decision.
When a consumer takes out a second mortgage loan or “home
equity loan,” it is usually based on their home’s
market value. Therefore, an assessment of such will usually
be required. In some cases, the equity in the home is a consideration,
Equity is understood as the difference between the home’s
market value and how much you have yet to pay on the house
(that is, how much you still owe on your first mortgage loan).
If your home is worth, for example, around $300,000 if sold
today, and you still owe $150,000 on the original mortgage,
your equity in the property is around $150,000.
What is important to understand about a second mortgage is
that it means that, in addition to the lien held on your house,
there will now also be a secondary claim, as well. The lien
is in association with the first mortgage loan while the claim
is a product of the lending institution financing your second
Option One Mortgage reminds consumers that should they default
on the terms and conditions of a second mortgage loan, there
could be serious consequences. While a home equity loan is
a legitimate way for homeowners to access cash when they need
it, it is not a source of “free” money. The money
must be paid back, with interest.
If you choose a second mortgage loan originated by Option
One Mortgage, your loan officer will work with you to make
sure you understand the financial obligations and consequences
of any loan agreement you make.