Second Mortgage Loans get their name because they are recorded as a lien on your property in second position, behind the first mortgage (your main home loan). Usually, a second mortgage will be no greater than 15% - 20% of your home's value. However, there also exists a second mortgage loan product called a 125% second loan. These loans will allow you to borrow up to 125% of the value of your home, usually only for cash or to make improvements on the property but not as purchase money.

A popular use of the second mortgage when buying a new home is to borrow 80% on the first mortgage, 15% on the second, and put 5% down. This way borrowers can avoid paying for mortgage insurance and potentially have greater tax benefits. Consult with your loan officer and tax advisor for details on this program.

Second mortgages can have adjustable or fixed rates. Usually they will be due in a maximum of 15 years but often can be amortized over 30 years. This means that you can make payments as though the loan wasn't due for 30 years but once 15 years rolls around you will have to refinance, sell your home, or otherwise pay off the second mortgage.