U.S. Mortgage Index

Second mortgage

Definition

A second mortgage is a loan secured by a home that stands behind an existing first mortgage in lien priority. Home equity loans and some HELOCs are common forms.

In plain English

The first mortgage is usually the purchase or refinance loan. A second mortgage is another lien on the same property, paid after the first lien in a foreclosure recovery. A home equity loan or a HELOC can be that second lien. Those product pages explain how funds are taken. This page is the junior-lien idea.

Technical definition

Consumer glossaries describe a second mortgage as an additional loan secured by the home. Combined loan-to-value is a related underwriting measure, not this concept.

Why it matters

Lien priority, equity, and payoff waterfalls all depend on knowing there is more than one secured debt.

Sources reviewed