Second Mortgage

What Is a Stand-Alone Second Mortgage?

A stand-alone second mortgage is a loan that lets you borrow against your home’s equity without altering your primary mortgage. It’s called "stand-alone" because it’s a completely separate loan from your first mortgage. This means you’ll have two monthly payments: one for your original mortgage and another for the second loan.

Stand-alone second mortgages come in two main types:

1. Home Equity Loans

• Borrow a lump sum upfront and repay it with fixed monthly payments.
• Great for large, one-time expenses like home improvements or debt consolidation.

2. Home Equity Lines of Credit (HELOCs)

• Access funds as needed, similar to a credit card, during a draw period.
• Ideal for ongoing or unpredictable expenses, such as medical bills or education costs.

Who Can Benefit form a Stand-Alone Second Mortgage?

A stand-alone second mortgage is ideal for homeowners who:

• Have Significant Equity: Typically, lenders require you to have at least 15%-20% equity in your home.
• Want to Avoid Refinancing: If your current mortgage has a great interest rate or terms, a second mortgage lets you borrow without changing it.
• Need Funds for Specific Goals: Whether it’s a home renovation, paying off high-interest debt, or funding education, a second mortgage can help.
• Have a Stable Financial Situation: Since this is a second loan, you’ll need to manage two monthly payments.