A home equity loan is a loan secured by a second mortgage on one's principal residence, typically used for non-housing expenses. It gained popularity in the late 1980s due to its tax-deductible interest.
A homeowner's equity account is a credit line offered by banks and brokerage firms, allowing homeowners to access the equity built up in their homes. This type of account acts as a revolving credit second mortgage.
A junior mortgage, also known as a second mortgage or subordinate mortgage, is a mortgage loan that is subordinate to another loan against the same property. In the event of default and foreclosure, the holder of the junior mortgage is only repaid after the senior mortgage and any other prior liens have been settled.
A subordinated lien created by a mortgage loan over the amount of a first mortgage, often used to reduce the amount of a cash downpayment or to raise cash in refinancing.
Secondary financing refers to additional loans or mortgages taken out on a property that already has an existing or primary mortgage. This type of financing is often used to cover down payments, renovations, or other expenses.
