Second mortgages can be used to get ‘cash in hand’ to use for any reason.
There are basically two types of Second Mortgage Loans: Closed End and Open End.

Closed end Second Mortgages have an amortization period, and generally, a fixed rate. They pay off in a preset term.

Open end Second Mortgages are often called Home Equity Lines of Credit or HELOCs for short. They offer the ability to reuse the money as you repay the line. It works just like a credit card except the rate of interest is much lower. HELOC loans have become very popular of late, especially when used as part of a down payment for a purchase transaction. This is done to avoid the Private Mortgage insurance monthly cost. Call one of our Loan consultants to discuss this money saving feature.

For both types of Second Mortgages, the interest you pay is usually tax deductible. To determine deductibility of mortgage interest, contact your tax advisor.