A second mortgage, the second loan secured against the home, and second in importance to the first, means that should the borrower not be able to pay off the loan in full and the bank or money lender repossessed the home to recoup their losses, the first loan would be paid off first and the money that was over would be used to pay off the other loan.

The second mortgage loan has a higher interest rate than the first one to compensate the lender for the extra risk he has to take. The loan charges will be less as there is already a loan registered in the borrower’s name. It is not difficult to qualify for a second mortgage loan as the loan is secured against the home.

It is always prudent to shop around for lending agencies and banks that have the best interest rates and loan charges.

This loan is usually used for home renovations. Renovating the home periodically is important to keep up the value of the property. Major repairs can cost a lot of money but have to be done. The best way is to borrow the money and get the jobs done. Get quotes from various building companies and building supply companies for the work that needs to be done. When you have the best prices you can apply for a loan for the correct amount you will need to get the job done.

This loan can either be taken in a lump sum or you can open a line of credit and spend the money as you need it. In this instance, the line of credit would work very well as you will be able to pay for labor and material as the phases of the project are completed and the money will be spent for the purpose for which it was borrowed. This line of credit works much like a credit card.

A second mortgage can also be taken on the home to pay for a child’s college education. This loan is usually a large amount of money and a second mortgage would be ideal to pay theses expenses.