I’m pretty young and I don’t know a lot about mortgages in the first place but how and why can you take a second mortgage on your house to gain a bunch of money? I hear people say it all the time in shows and movies and it sounds like a very bad thing.
In: Economics
You are taking out a 2nd loan against your property. Rule of thumb is the 2nd mortgage and 1st mortgage, combined, usually cannot exceed 80% of the homes value. Say your home can appraise for $100k and you currently still owe $50k, assuming you qualify, you could take out a 2nd loan(mortgage) for up to $30k. You would then have a 2nd payment due every month on the 2nd loan on top of the first mortgage payment.
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