Second Mortgage Loans

A second mortgage is a loan that is subordinate to another loan taken against the same property. They are called subordinate in the sense that if the loan is defaulted, the first loan gets paid off first before the second one. In such cases of default, any remaining money will be used to pay off the second mortgage after clearing the first.

The second mortgages are therefore riskier for the lender. Thus, second mortgage loans have a higher interest rate. They also carry closing costs and points that make them more expensive.

There are different types of second mortgages. In the most common type, the borrower takes loan for only the actual equity. For example, if a property is valued for $75,000 and if the owner has availed a first mortgage for $50,000, it is easy to secure a second mortgage for $25,000.

A line-of-credit second mortgage is another type in which the borrower applies for a loan but does not avail himself of it immediately. He can draw the money whenever he needs it.

Sometimes a second mortgage is taken at the same time the borrower secures the first mortgage. For example if the borrower wants to obtain a loan that demands a forty percent down payment and he has only thirty percent, he can apply for a mortgage for the required ten percent.

A second mortgage loan can also be applied for a value that is more than that of the borrower's property. But these types of loans are riskier for the financiers and demand greater credit. Moreover, the interest may not be fully tax deductible.

A second-mortgage loan is a good option if you need money urgently. Refinancing the first loan could also be a better option, but it depends on your case. But beware of the transaction costs when you decide between a second mortgage and a refinancing option.

Second Mortgage Loans provides detailed information on Second Mortgage Loans, Second Mortgage Loans After Bankruptcy, Second Home Equity Mortgage Loans, Second Mortgage Loan Rates and more. Second Mortgage Loans is affiliated with Florida Mortgage Loan Calculators [http://www.e-floridamortgageloans.com].

Get Mortgage Life Cover

If you have a mortgage, then mortgage life cover will make sure the loan is paid off in the event of your death, or, if you take out some add-on benefits, should you suffer from a critical illness or cannot work due to illness or disability.

Mortgage insurance is often called 'decreasing term cover' because the policy lasts the life of your mortgage and pays out a smaller amount each year as your mortgage decreases.

Although the amount of cover the policy pays out decreases in line with what you owe your mortgage lender, the premium you pay the insurance company each month stays the same.

These mortgage policies are cheaper than term life insurance and are guaranteed to pay off you mortgage if you die unexpectedly - providing you haven't increased your mortgage without increasing the sum assured under the policy, of course.

If you do borrow more, you should review your policy and consider taking out a top-up.

Remember, if you outlive the mortgage policy, you and your family get nothing. The policy only pays out when you die during the policy term unless you have included optional extras at additional cost.

These extras include:

· Waiver of premium

The insurance company pays your premiums for a set period if you cannot work due to sickness or disability

· Guaranteed or reviewable premiums

If your premiums are guaranteed they remain the same for the life of the policy. Reviewable premiums are adjusted periodically, meaning you can end up paying significantly more than you started with for the same cover.

· Critical illness

This add-on pays out a lump sum if you are diagnosed with an illness listed in the policy documents regardless of whether you return to work at a later date.

Most insurers won't pay out on your death if they have already paid out for a critical illness.

· Terminal illness

If the policyholder is diagnosed with a terminal illness, the policy pays out early.

Mortgage life cover is available on a single life or jointly with a partner or spouse if you hold a mortgage in joint names.

For a single life, the policy pays out on the death of the policyholder - or if one of the add-on events is triggered.

For joint lives, you have a choice on how the policy pays out.

Either the policy pays out on 'joint life, first death', that leaves the surviving policyholder with the cash.

Alternatively, the policy can be 'joint death, second life', sometimes called 'joint life, last survivor', which pays out on the death of the surviving policyholder. This would pay off the mortgage and leave children with an asset they could continue to live in or sell.

If you have mortgage life cover, always consider putting the policy in trust. This is simple to do and costs nothing. Generally, the insurance company provides a deed of trust.

Putting the policy in trust effectively puts the policy outside of your estate, so the money goes straight to your family rather than sitting in probate while your executor sorts out your will.

David Thomson is Chief Executive of BestDealInsurance an independent specialist broker dedicated to providing their clients with the best deal on their life insurance, critical illness cover and home and motor insurance.