A second (subordinate) mortgage loan refers to a mortgage taken out after the primary mortgage and is subordinate to the first in priority of claims on the property in case of default or foreclosure. One of the most common types of subordinate mortgages is a home equity line of credit (HELOC).
* HELOC allows homeowners to borrow against the equity in their home, typically after the first mortgage, making it a subordinate loan.
Other options:
* Government home purchase loans (A) and conventional home purchase loans (B) are typically first mortgages.
* A home equity conversion mortgage (C) is a type of reverse mortgage, which is also typically a primary loan, not a subordinate one.
References:
* Fannie Mae Selling Guide on subordinate financing
* HELOC regulations under Regulation Z