The term “second mortgage” refers to a mortgage loan that a consumer takes out on a property that already has an existing first mortgage loan. The amount you can borrow is sometimes related to how much equity you have in your home. The term “equity” refers to the amount of money you have invested in the house, measurable by the difference between the amount you still need to pay on the house and the property’s current value on the market.

So, for example, if your home is worth around $150,000 in today’s market, and you still owe $90,000, you have equity in the amount of approximately $60,000.

The second mortgage loan will be an additional lien on your home that will be held by the lending institution that finances it. This lien will be secondary to the lien held by the institution that financed your first mortgage loan. If the lending institution for both loans is one and the same, that institution will hold two liens on your property.

In fact, many people do choose to return to their original lender when they make the decision to take out a second mortgage loan. However, while this might seem like a convenient option, consumers would be well advised to do some research first, and make sure their lending institution is offering them the best deal, and the best customer service, available.

Regardless of the lending institution you select, make sure you are clear about all the terms and expenses associated with your new mortgage loan. Your loan officer is a good resource, and will be happy to clarify any concepts you do not understand, as well as, answer any questions you may have.