In essence, a 2nd mortgage is a type of a home equity loan, but instead of giving options such as a line of credit, it is strictly a loan usually intended for a specific purpose. Good reasons to consider a home equity loan include large amounts of debt because of high interest credit cards or medical expenses, needing money to invest in a business, to pay college tuition or needing money to purchase an automobile.
If you are looking for the ability to access cash over a long period of time, than a second mortgage probably is not your best bet. Instead you may look towards a line of credit. A 2nd mortgage works best for those interested in one lump sum.
For the most part, a second mortgage will only offer fixed interest rates for borrowers. Although many will offer repayment schedules of 30 years, most are closer to …