Mortgage - Free Calculators

Terminologies for Alphabet Q-T

Terms for Q Quitclaim Deed Quit Claim Deed refers to a deed that transfers, without warranty, a grantor's interest in the ...Terms for R Rate Cap Rate Cap is a limit by which the interest rate on an adjustable rate mortgage (ARM) can ... Real Estate Mortgage Real Estate Mortgage helps in the purchasing or financing of real estate is known as real ... Real Estate Settlement Procedure Act (RESPA) RESPA (Real Estate Settlement Procedures Act) is a consumer protection statute passed in ... Reconveyance Clause Reconveyance Clause is a statement in the deed of trust (used in mortgage transactions) that ... Recording Fees Recording Fee is a fee that the local government charges in order to record a mortgage ... Refinancing Refinancing means the taking of a new mortgage loan in order to replace an existing one using ... Renegotiable Rate Mortgage Renegotiable Rate Mortgage is a kind of home loan introduced by the Federal Home Loan Bank ... Repayment Plan A repayment plan refers to an agreement between the lender and the borrower when the ... Replacement Reserve Mortgage lenders make payments on taxes and insurance from the borrower's monthly ... Rescission In contract law, rescission implies that a contract between different parties is cancelled. This ... Retail Sales Retail Sales are an indicator, prepared monthly by the Commerce Department that measures ... Retirement Plan 401(k) Are you in service for a long time and thinking how to save money for your retired life? You ... Retirement Plan 403(b) There are a number of ways by which you can make money. But your expenses hardly allow ... Reverse Annuity Mortgage Reverse annuity mortgage (RAM) is a mortgage loan program designed specially for senior ... Right of Ingress or Regress Right of Ingress or Regress is an excellent combination of two terms ''Ingress'' and ''Regress'' ... Risk-based Capital Risk Based Capital is a capital standard adopted for saving institutions in 1989. It requires ... Rate Improvement Mortgage Rate improvement mortgage is a fixed rate mortgage that includes a clause allowing the ... Recordation Exam The recordation exam includes a fee charged by the title company. The title company reviews ... Recording Recording refers to the filing of a legal document. Documents such as deed, mortgage note ... Rehabilitation Mortgage Are you planning to purchase a property and then renovate it? Well then, you may go for a ... Rent Loss Insurance Rent loss insurance policies are required in case you have offered your property as rent and ... Renters Insurance Renters Insurance is a policy that pays for replacement of possessions, and not for loss or ... Repayment Mortgage Repayment mortgage is the most common type of mortgage, where principal and interest ... Revolving Credit Revolving Credit is a credit agreement that allows a customer, to borrow against a pre ... Right of First Refusal Right of First Refusal refers to a provision in an agreement which states that a specified party ...Terms for S Sale-Leaseback Sale-Leaseback is a financing technique in which a property is sold off to an investor who ... Sales contract Sales contract is a purchase agreement between the buyer and seller of a property. The ... Secured Loan Secured loan refers to the borrowed loan that is backed by collateral. It requires some form ... Self Certification Mortgage Self Certification Mortgage is a type of mortgage, which allows a borrower to state his income ... Simple Interest Mortgage Simple Interest Mortgage refers to that mortgage, which comprises of daily calculation of... Sub Prime Mortgage Subprime Mortgages are home loans that are offered to people with poor credit history, non ... Sweat Equity Sweat equity refers to the quantity of manual labor put into the construction of a ... Satisfaction of Mortgage Satisfaction of Mortgage is a document issued by the mortgagee when the mortgage loan ... Second Mortgage Second Mortgage is a home loan taken against home equity that is kept as collateral for the ... Security Interest The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest ... Serious Delinquency Serious Delinquency refers to a single-family mortgage that is 90 days or more past due date. ... Shared Appreciation Mortgage The Shared Appreciation Mortgage (SAM) is a new home mortgage concept having fixed ... Step Mortgage Two-step mortgage is a kind of hybrid adjustable rate mortgage, that is, it has the features ... Stockholders Equity Stockholders Equity refers to the total value of all the assets owned by a person or a ... Submortgage Submortgage is that type of arrangement in which a mortgage lender guarantees a ... Subordinate Financing Subordinate Financing refers to any loan or mortgage that has a lower priority than that of the ...Terms for T Tenancy In Common Tenancy-in-common is a form of property ownership in which two or more individuals have ... Title Search Title Search refers to a search by a title company or attorney in some states of the public ... Treasury Bonds Treasury bonds are long-term debt securities issued by the US government. These bonds ... Tax Certificate A tax certificate is a certificate issued to the purchaser of property by the state or local ... Tax Lien A tax lien is a lien imposed by the government on the title to the property in order to ... Tax Sale A Tax deed sale is a forced sale of the property conducted by a government agency on ... Teaser Rate Teaser Rate or Introductory Rate is the initial low interest rate charged on an ARM ... Title Company A title company is an organization that specializes in: Checking the property title ... Title Insurance Title Insurance is an insurance policy which insures the homebuyer or the lender against ... Title Opinion Title opinion is a written statement from an attorney which describes the quality of title to ... Tracker Mortgage Tracker Mortgage is a very popular mortgage product and is based on Bank of England's ... Transfer Tax Real Estate Transfer Tax (RETT) is a tax charged by state or local governments when the ... Truth-In-Lending Act The Truth-in-Lending Act was enacted in 1968 as a part of the Consumer Protection Act. The ...

Can quit claim remove name from title?

I was married for 8 yrs and separated now for 4 but not officially divorced yet. My ex hubs purchased a condo 3 months before we got married and I had nothing to do with any paper work or any involvement with the condo. We lived in it for 8 yrs and I left 4 yrs ago due to an unhealthy and verbal abusive environment. I left everything but by cloths and started a new life. Now after 4 years of being separated he wants me to sign a quit claim deed because he wants to sell the condo. What I don't understand is why I have to sign this form. Could anyone be added to a title without knowing? Am I entitled to something? I really would like to pay for a divorce.

Terminologies for Alphabet M-P

Terms for M 100% Mortgage A 100% mortgage is a home loan that is equal to the total sale price or appraised value ... MACRS MACRS (Modified Accelerated Cost Recovery System) is a rule established by the Economic ... Medium-term Notes Medium-term Notes (MTNs) are corporate notes which a company offers its investors .... Monetary Policy Monetary Policy refers to the process of managing a nation's money supply in order to ... Monthly Income Monthly Income refers to an individual's basic monthly salary, plus any additional ... Mortgage Finance Mortgage Finance is a financing mechanism for the purchase or refinance of real estate, with... Maturity Date Maturity Date is a last day, when the total principal balance of a mortgage deal, comes due.... Maximum Financing Maximum financing involves a loan amount that is within 5% of the highest loan-to-value ... Monthly Commitments A loan commitment refers to a written document which states that a mortgage company ... Mortgage Calculator Mortgage Calculator which is used for calculating borrower's mortgage payments. As we ... Mortgage Indemnity Guarantee The Mortgage Indemnity Guarantee is a one ''off fee'' that a lender pays to an insurance ... Mortgage Interest Deduction Mortgage Interest Deduction is a federal tax reduction to borrowers. This tax reduction is ... Mortgage-Backed Securities (MBS) Mortgage Backed Securities are parcels of mortgage loans grouped by the Government ... Multifamily Mortgage Multifamily mortgages are residential loans meant for properties that are occupied by more ...Terms for N National Association of Realtors The National Association of Realtors (NAR) was founded as the National Association of ... Net Effective Income Net Effective Income is the borrower's gross income minus federal income tax. Net... No-Point Mortgage No-Point Mortgage or a low-point loan is a type of mortgage which requires no points. It ... Non Performing Asset Non Performing Asset is an asset that is not effectively producing income. It means an asset... Note Rate Note Rate is the mortgage rate stated on a promissory note. It is also known as the Nominal ... Negative Amortization Negative Amortization implies an increase in mortgage debt when monthly payments on a ... Net Cash Flow Net Cash Flow is the monthly operating income that remains after deducting monthly housing... Net Closing Costs Net Closing Costs is the total of all the closing costs quoted by a lender, minus any credit... No Equity Loan No Equity Loan is a home equity loan program that allows a borrower to take out a loan up ... Non Assumption Clause Non Assumption Clause is a clause stated in a mortgage contract, which does not allow for ... Non Liquid Assets Non Liquid Assets refer to possessions that cannot be transformed easily into cash ... Notary Fee Notary Fee is a fee charged by a licensed notary public to certify the signature on the loan ... Notice of Default Notice of Default is a formal notice stating that a borrower has late payments or missed ...Terms for O Open Mortgage Open mortgage is a kind of home loan that allows a borrower to make a partial or full ... Option Option is a provision in a contract that gives the option holder, the right and not the obligation ... Open-End Lease Open-End Lease is a kind of rental agreement where the lessee is obligated to purchase ... Owner Financing Owner financing or Carry Back Loan is a home-financing method in which the buyer borrows ... Offset Mortgage An offset mortgage is a flexible mortgage which allows a borrower to keep balances such .... One Account Mortgage One Account Mortgage is a type of mortgage which allows a borrower to put all his money ... One Year Adjustable 1 Year Adjustable Rate Mortgage (ARM) is a mortgage in which the initial interest rate ...Terms for P Package mortgage Package Mortgage is a mortgage agreement that provides home financing including ... Partial Entitlement Partial Entitlement is the sum of money guaranteed under VA loan to an eligible veteran ... Percentage Point Percentage points are utilized to describe the variation in interest rates or inflation rates ... Prepaids Mortgage lenders often require you to make advance payments at the time of loan closing ... Principal Principal is the original loan amount specified on your mortgage note. When you make the ... Private Mortgage Insurance Private mortgage insurance (PMI) is an amount paid by a private insurance company to a ... Processing Fee Processing fee is a kind of fee required to prepare a mortgage loan application and ... Promissory Note A promissory note or a mortgage note is a legal document that states that a borrower ... Purchase Money Mortgage Purchase money mortgage is a home financing technique by which a buyer borrows from ... Partial Payment Partial Payment is a loan payment that is not enough to cover the scheduled monthly ... Participation Mortgage Participation Mortgage is a type of mortgage, which is made by one or more lender. It ... Pension Mortgage Pension Mortgage is a kind of interest only mortgage, which is backed by a pension plan. It... PITI Pension Mortgage is a kind of interest only mortgage, which is backed by a pension plan. It ... Planned Unit Development Planned Unit Development (PUD) refers to a type of residential, commercial or industrial ... Pledge Account Mortgage A Pledge Account Mortgage allows you to use a savings account as the collateral for ... Portable Mortgage Portable Mortgage is a type of mortgage, which can be transferred from one property ... Power of Attorney Power of Attorney is a written legal document that allows a person to make legal decisions ... Pre-Foreclosure Sale Your mortgage lender may choose to foreclose your property when you fail to pay your ... Pre-Qualification and Pre-Approval Pre-Qualification - The prospective purchaser or builder normally obtains pre-qualification... Preferred Stocks Preferred stocks entitles the shareowners to receive a fixed dividend, that are senior to ... Prepayment Penalty Borrowers are often required to pay an amount of charge to the lender on account of ... Private Label MBS Private Label Securities are those mortgage backed securities MBS which do not conform to ... Private Mortgage Private Mortgage is a type of mortgage, which is granted by the private lenders. Features... Public Auction Public auction is a gathering at a pre-announced location where the lender sells off the ... Purchase Agreement Purchase Agreement refers to a legal document stating the terms and conditions under ...

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Tax implication of Quit Claim Deed

What are the tax implications of a Quit Claim? Who pays the property tax? Thank you.

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Quitclaim Deed: Document transferring property-interest

Quitclaim deed is a legal document that helps to transfer your share of interest in the property (house, land, mobile home, etc) to another individual. The person giving away the interest is the grantor while the one who accepts it is the grantee. While the interest is transferred, no warranty is made on the rights which others may claim from the property. The deed implies that the grantor simply transfers his interest but does not guarantee whether the grantor actually has ownership rights on the property. Moreover, the deed does not guarantee that the property is free of debt. To help you get a clear idea of the quitclaim deed, I have divided the information into different sections as given below: How to make the deed validWhen to use the quitclaimHow a life estate can help after you sign over the deedReverse/Undo a quitclaim deed How to make the deed validIn most states, only the grantor and not the grantee sign the Quitclaim deed form as prepared by an attorney. But there are some states which do require the grantee to sign the deed. After the grantor signs the deed, a notary public should sign and stamp it without which the deed is not taken as valid. At present, only a few states like Arkansas, Georgia, Michigan, Ohio, South Carolina and Vermont require the deed to be signed by witnesses other than the notary public to make the quit claim valid. Officials from states other than where the property is located can also notarize the deed. This however depends upon the County Recorder of that state. The deed is then recorded at the land records office in the county where your property is located. The Office is called the County Recorder's Office, County Clerk's Office, Register of Deeds, and Land Registry Office depending upon the state where you own the property. After being recorded, the deed is often sent to the grantee or the grantor, title insurance company or anyone as decided by the parties. When to use quit claim deedThe deed is commonly used in the following situations. In a divorce, married couple can transfer ownership of the property to one spouse. A spouse may add or remove the other spouse's name to/from the property title after marriage. While a property is purchased, at closing the interest is transferred from the seller to the buyer through this deed. If a property is sold off to the new owner and the title shows the old owner as having certain rights, the previous owner should sign a quit claim and transfer all his rights to the new owner. A person planning for an estate or a living trust uses the deed to transfer ownership of the property into a trust.How a life estate can help after you sign over the deedEven after signing a quit claim, you can have the right to possess the property only if you retain a life estate for yourself. The life estate gives you the absolute right to stay at the property till your death. Otherwise, you have no legal right to the property after the deed is signed off to the grantee. After your death, the grantee gets the right to possess the property. Reverse quit claimOnce you have signed a quit claim, it becomes very difficult to reverse or undo the deed unless the grantee agrees to quit claim the property back to you. In case the grantee refuses to sign, you will have to prove that the transfer of property is invalid. For instance, you can prove that you signed the deed under threats, external pressure or may be the grantee made you sign by telling lies. In order to show the transfer is invalid, you can take help from a lawyer. No doubt, a quit claim is a good option if you wish to take over or give up interest in a property. But as far as the transfer of title or ownership rights is concerned, it offers no warranty. Experts therefore suggest another deed for transfer of ownership rights - the warranty deed which claims that the property is transferred in clear title, that is, it is free from any kind of lien. Related Forum Discussions Will grantor lose rights on property after quit claim? Can quit claim remove name from title? Can quit claim deed transfer mortgage debt? Will quick claim protect my home from creditors? Tax implication of Quit Claim Deed Owner deceased: Is quit claim deed possible? Quit Claim under Tenancy-in-Common Is quit claim a way to remove co-borrower from title? Can I quit claim myself off property before it gets to foreclosure? Which is better - Interspousal Transfer or Quit Claim Deed?Consolidated InformationIf you are not getting the required information, click here for a consolidated information on Quitclaim Deed.

Reverse Mortgage: The Financial Aid for Seniors

If you're a senior person looking to cash in your home equity and use it to your advantage, a reverse mortgage can help. With a reverse mortgage, you can convert your home equity into a steady flow of tax-free income thereby receiving a paycheck at regular intervals. Since the loan provides easy flow of cash, therefore it is the preferable choice of seniors in the US as well as in UK, Canada and even in India. This article will help you get an idea of reverse mortgages, especially the aspects given below.What is a reverse mortgage?Do I qualify for the loan?How much of cash is available?How do I get the cash?Are there any drawbacks? What is a reverse mortgage? Reverse mortgage is a home loan which provides you with cash if you're planning for retirement or have already retired. Such a loan does not require to be paid back until the loan period is over and you can continue to own your home even during the life of the loan. Do I qualify for the loan? Unlike other loan options, there isn't any income or credit requirement to qualify for a reverse mortgage except that there shouldn't be any debt on your home. And, even if there is, it should be paid off by the cash proceeds of the reverse loan. To be eligible for the loan, one has to be 62 years or above. Know more How much of cash is available? The amount you receive through a reverse mortgage will depend on:How old is the youngest borrower?The appraised value of your homeThe equity built up in your homeWhat loan program you chooseCurrent mortgage rates How do I get the cash? You can receive funds from a reverse mortgage in different ways. The lender or the company can provide you with a single payment.You may ask for monthly cash advances.You can apply for a credit-line account which gives you the opportunity to withdraw a required amount of cash whenever you are in need.The lender may allow for a combination of monthly cash advances as well as andquot;credit-line accountandquot;. Are there any drawbacks? A reverse mortgage is just the opposite of a traditional mortgage which requires the payment of the principal loan amount along with interest on a monthly basis. This helps you to build up home equity thereby raising your home value. But with reverse mortgages, there are no such monthly payments. Hence, the total debt starts going up. The home equity therefore reduces to an extremely low value unless the home value goes up at a higher rate. Therefore reverse mortgages are often known as andquot;rising debt and falling equityandquot;. An example on andquot;Rising debt and falling equityandquot;. Monthly Loan Amount : $2,000 Yearly Loan Advance : $24,000Yearly Interest Rate : 8%Original Home Value : $250,000Appreciation Rate of Home Value : 5% per annum End of Year Principal Amount ($) Total Interest ($)Loan Amount ($) Total Home Value ($) Home Equity ($)(Total Home Value - Loan Amount) 124,0001,05225,052 262,500237,448248,0004,102 52,102275,625223,5233 72,0009,22481,224289,406208,182 496,00016,495112,495303,876 191,3815120,00025,990 145,990319,070173,080 The above calculation shows, even if your home value goes up, it may not be enough to raise your home equity. The rate of appreciation in home value should be high enough such that even if your loan balance increases, your home equity won't go down easily. Inspite of its drawback, reverse mortgages are preferable options when it comes to paying for your healthcare costs, remodeling your home, making a big purchase and changing your lifestyle. Moreover, if you have debts to pay off, need money for someone's education or make plans to go on a vacation, reverse mortgages are worth considering. Related Articles:Comparative analysis of Reverse Mortgage and others.Eligibility of Reverse MortgageReverse Mortgage - When to pay back?Is Reverse Mortgage safe?Types of Reverse Mortgage ProductsTaxes for Elderly Mortgage ApplicantsRelated References:Mortgage For SeniorsKnow More About Reverse Mortgage

Is Mortgage Refinance a wise financial move?

Are you looking forward to get extra cash, save more and pay off all your debts? Or, do you wish to replace your current mortgage with a new loan having more favorable loan terms. There's a way out by which you can fulfill all such needs - a process called refinance (or refinancing). It gives you the chance to pay down your current home loan from the funds offered in a new loan against the same property as the collateral. For example: Mr. X and Mr. Y both took a mortgage loan worth $400,000. After 4 years, both of them paid off $200,000. Mr. X then took another home loan worth $200,000 in order to repay the existing balance on the loan. On the other hand, Mr. Y opted for a second home loan worth $300,000 in order to repay the unpaid loan balance which is $200,000. Mr. Y could use the remaining balance in order to fulfill other financial obligations. The first case is regarded as mortgage refinancing and the second where the new loan amount is higher than that of the existing loan balance, is a cash-out refinancing. 6 Reasons for you to Refinance You want to save more Reduce monthly payments by getting a lower mortgage rate or a longer loan term. In the second case, your monthly savings increase but you will be paying a larger amount of interest for the life of the loan. You want to pay down your mortgage quickly Shorten the length of your mortgage by reducing the period of repayment. Monthly payments will no doubt go up, but you will be able to save more in the overall interest payment. Moreover, it will allow you to get home ownership in a short time. You need extra cash Borrow more than the unpaid loan balance if you have enough home equity. With the extra cash, you can pay off high interest debts such as credit card balances or installment loans. You gain out of it as the interest on these debts are not-tax deductible unlike the mortgage interest. You wish to pay off a high interest second mortgage If there's enough equity at your home, you can refinance your second mortgage and combine both the loans into a single loan. The monthly payment on the new loan is likely to be lower than the combined payments on the first and second mortgages. You want to convert from an ARM to an FRM This allows you to lock in at a low rate. You can thus repay the loan with stable monthly payments rather than variable payments throughout the life of the loan. You want to get rid off PMI If your current loan balance is below 80% of the new appraised value of your home, you can refinance and stop paying PMI. When to refinance your current loan Refinancing can be a way out to keep you from making higher payments but you can only get the maximum benefits when you're into the process at the right time. Here are a few conditions under which you may seek a refinance loan. You have the home equity to help you borrow It is feasible to can go for a refinance when you have built up at least 10% equity in your home (For Fannie Mae owned mortgages, the value is 5%). It is also possible for you to choose the option if your equity is less than 5%, but you may have to pay a certain amount of cash in order to make up for the difference in the equity. You find that current market rates are low It's better to follow the 2% Rule which suggests that you can enjoy the benefits of a refinance if you can secure an interest rate 2% below the rate on your current loan. The interest savings will help you to recoup the costs you've paid for the new loan provided you stay in the property for a certain period of time (break-even period). However, there are no-cost as well as low-cost refinance loans wherein the costs are included into the loan. You can expect a slightly higher rate on such a loan but if it's lower than your current rate, then it's still a suitable choice. You haven't been late on the payments There is no such limit on the number of times you can go for a refinance. Most lenders prefer that you have no late payment for the past 12 months before you switch over to a new loan. When not to refinance Refinancing does not make sense under the following situations:Your property value has gone down If your property value reduces and you refinance up to 80% of the reappraised value, your original mortgage amount may be higher than this amount. Thus, the new loan will not be sufficient enough to help you pay down the existing one. You are paying off the first loan for a long time If you are making payments on a long term loan, say, a 30 year mortgage for the past 10 to 20 years, then refinancing to another 30 year loan will not be a good option as it may increase your overall payment. Your credit profile isn't impressive If you have messed up with your credit by delaying payment on loans and bills, there is hardly any chance that you will qualify for a low rate mortgage. Off course there are lenders in the subprime market, but it's better to avoid them as they'll possible charge you with higher rates and fees. You have used up enough equity in your home Refinancing may not be that useful if you have already used up 90% or more of your home value in taking out a mortgage or any home equity loan. You won't be able to get the best rates available in the market as when you refinance a 90% LTV loan, you will probably require a loan of that value or higher. This will be quite closer to being a 100% financing option and hence the rates will be comparatively higher. You have a few years left on the current loan If there is only a few years left on your current loan, then there's not much use refinancing it with a long term loan. You may need extra cash but with a long term loan, you may end up paying more throughout the loan period. In this case, if you do not move according to a planned budget then it will be hard to carry out your day to day expenses.Refinancing will make sense if you are into it for the right reasons and at the right time. You need to decide upon the various ways of refinancing and the possible loan options that will suit your needs and fit into your situation. Related Readings How to refinance your current mortgage Which Refinancing Option suits your situation? 9 Mistakes in Refinance committed by mortgage seekers Top 24 queries on RefinanceRelated Forum Discussions Should I need a title insurance at the time of refinance? Is it possible to refinance after bankruptcy? Should I refinance my home to consolidate the debts? Can i refinance my home which is filed for Federal tax lien? Is the cash from Refinance - Taxable?Is it possible to combine ARMs and then Refinance?

Should you go for a Second Mortgage loan?

You may need a lot of cash but cannot avail it through credit cards or any other means. Here's where a second mortgage can help you. This article gives you an overview of second mortgage and covers the following aspects:What is second mortgage?When do you choose a second mortgage?How much can you borrow?What are the possible rates, terms and fees?How to get a second mortgage?What happens to the second loan if you refinance the first?Do it yourself! Check out whether second mortgage is the right option for you What is second mortgage? It is a loan taken against your home on which there exists a primary mortgage. The second loan has less priority compared to the first on the same property. So, if you default, you need to clear your first loan prior to paying off the outstanding balance on the second loan. When do you choose a second mortgage? There are situations when you may think of cashing out on your home equity. You may have accumulated a large amount of debt through auto loans, balances on high interest credit cards and other bills (medical costs, kid's tuition fees etc) and need to pay them off. There may be an opportunity for you to invest cash in a business. You can then use a second loan to go for it. But check out if the rate of return on your investment is higher than the second mortgage rate. Only then it will turn out to be a profitable venture. You may plan to avoid paying private mortgage insurance. But this is possible only when you get a second loan that makes up for 20% of the home purchase price. You may wish to repay debts and eliminate judgments, pay for your car, purchase a vacation property or plan for a vacation. You can obtain the required cash by taking out a second loan. How much can you borrow? A second home loan allows you to borrow on the basis of your home equity. The equity is the difference between the current appraised value of your home and the amount you have paid towards the first mortgage. With most lenders, you can take a second loan such that the total loan-to-value ratio of your first and second loan is equal to 85% of the home's appraised value. However, there are lenders in almost all states excepting Texas and West Virginia who allow you to take out second mortgages equal to 125% of the appraised value. What are the possible rates, terms and options? The interest rates on a second loan are higher to that of the first loan. This is primarily because if you default, you will be paying off the first loan prior to that of the second and as such there is a risk involved in offering second mortgages. However, you may choose either a fixed rate home equity loan or an adjustable rate home equity line of credit as your second home loan option. The lender will quote you a rate depending upon your credit score, total loan to value ratio and the current market trends. The loan term will vary from 15 to 30 years depending upon the option you choose. But in general, a second loan is offered over a shorter time period compared to a first loan. How to get a second mortgage? Getting a second mortgage is similar to taking out a first mortgage on your home. You need to shop for a suitable loan offer by approaching different lenders and getting quotes from them. You can simply fill out a no-obligation free short form to get quotes from the community ranked lenders. Then you should compare the quotes, find out the offer that can cost you less in comparison and provide all necessary paperwork while you apply for the loan. The lender will conduct an appraisal on your home in order to determine its current value and complete all the steps that are necessary to complete the loan processing so that he can arrange for the closing. At closing, you will be signing the note and other documents as required by your lender. You will have to pay closing costs similar to that of your primary loan. What happens to the second mortgage if you refinance the first? When you refinance the first loan after getting the second mortgage loan, you should request your lender for a subordination of the second loan. This implies that your second home loan will be considered as a junior lien compared to that of the refinance loan. Otherwise, if you do not subordinate it, the second mortgage will be taken as the first lien and the refinance loan will take over the second lien position. In this case, there will be less risk with the second loan but higher risk involved with the refinance as a result of which the first mortgage refinance will cost you more in interest charges. With a second home loan, you get the chance to tap a large sum of money. Moreover, you can deduct the interest on your taxes up to a certain limit. But you cannot overlook the costs and the high interest rate associated with a second loan. Besides, if you default on the second loan, you may lose your home. Therefore, prior to going for a second mortgage, it is best to prepare a budget and find out how much you can afford to pay in addition to the first loan. Related Articles10 Big Mistakes while looking for second home loanTapping your equity with a Home Equity Line of CreditSteps to protect your equity while shopping for Second MortgageRelated Forum DiscussionsCan I get second home loan with bad credit?Should I take out second mortgage to pay for credit card?Home sold due to foreclosure - Am I liable for second loan?Second mortgage charge off - What does it mean?Is Second mortgage interest tax deductible?California Second Mortgage on rental propertyDo I need to pay for second loan even after charge off?What happens to second mortgage after deed-in-lieu of the first?