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Second Mortgage

Definition of "Second mortgage"

Mortgage debt with a subordinate claim to the first mortgage. A second mortgage is senior to subsequent liens, and may be used to reduce the amount of a cash down payment or in refinancing to obtain cash for some purpose. The interest rate on the second mortgage is higher because usually has a repayment term much shorter than the first mortgage with a fixed amortization schedule. there may also be a balloon payment.

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