IvoryscholarshipLenders generally issue a first or primary mortgage before they allow for a second mortgage. This additional mortgage is commonly known as a home equity loan. Most lenders don’t provide for a subsequent mortgage backed by the same property. There’s technically no limit to how many junior loans you can have on your home as long as you have the equity, debt-to-income ratio, and credit score to get approved for them.
Why Is It Called a Mortgage?
The word “mortgage” comes from Old English and French meaning “death vow.” It gets that name since this type of loan “dies” when it is either fully repaid or if the borrower defaults.10
The Bottom Line
Mortgages are an essential part of home buying for most borrowers who aren’t sitting on hundreds of thousands of dollars of cash to buy a property outright. Different types of home loans are available for whatever your circumstances may be. Different government-backed programs make it possible for more people to qualify for mortgages and make their dream of homeownership a reality, but comparing the best mortgage rates will make the home-buying process more affordable.
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