Second mortgage

A second mortgage sits behind your first in priority, so if the home is sold under default the first lender is paid in full before the second sees a dollar. That extra risk is why seconds carry higher rates (often 8–12%+) and usually a lender fee.

They're useful when breaking your first mortgage would cost more in penalty than the second's higher rate costs in interest — common for accessing equity mid-term, consolidating debt, or covering a short-term need without disturbing a low-rate first.

Most second mortgages are funded by B or private lenders on short interest-only terms, with a plan to roll everything into one new first mortgage at the next renewal or refinance.