So, if the second-mortgage holder foreclosed, the foreclosure sale proceeds wouldn’t be sufficient to pay anything to that lender. That’s because all the money from the foreclosure sale would go to the senior lender. But the second-mortgage lender could still sue you personally for repayment of the loan.

Following a first-mortgage foreclosure, all junior liens (including a second mortgage and any junior judgment liens) are extinguished, and the liens are removed from the property’s title. But the second-mortgage debt and creditor’s judgment remain, even though they’re no longer attached to the foreclosed property.

A second-mortgage holder can initiate foreclosure proceedings even if the first mortgage is not behind on payments. The second-mortgage lender must still take all the necessary steps in the foreclosure process, and must also notify the first lender of the intention to foreclose on the property.

The longer the loan is unpaid, the greater your negotiating power.

1. Contact the lender to discuss the debt. Begin the settlement process by expressing an interest in paying the debt.
2. Make an offer.
3. Remind the lender you know your rights.
4. Put any agreement in writing.

If your mortgage is not underwater or your second mortgage is partially secured, and you stop paying your second mortgage, the holder of the second mortgage will likely foreclose because it stands to recover all or part of the money it loaned to you from the foreclosure.

The second mortgage (or other junior lien) you strip is treated as a nonpriority unsecured debt when you file your bankruptcy. Instead, you will pay a portion of this unsecured debt (usually a very small amount) through your Chapter 13 plan.

The amount you can borrow with a second charge mortgage depends on the equity you have in your property. The equity is the value of your home, minus the mortgage you owe. The amount lenders offer can vary, but between 75%-100% of the equity is a good starting point.

Second mortgages are separate loans that have their own applications, closing costs and monthly payments. Second mortgages allow homeowners to borrow against the equity in their homes without having to refinance the first mortgage.

A second mortgage is another loan taken against a property that is already mortgaged. A second loan, or mortgage, against your house will either be a home equity loan, which is a lump-sum loan with a fixed term and rate, or a HELOC, which features variable rates and continuing access to funds.

Carrying two mortgages at once Buyers who have enough income can carry two mortgage payments at once if they still meet the debt-to-income ratios required by their lenders. You, then, might be able to qualify for two mortgages at once, if your credit score and job status are also strong.

If you refinance your first mortgage but not your second mortgage, the second mortgage is promoted into first position (because it’s older than the new first mortgage), and the newly refinanced mortgage takes the junior position.

It is possible to refinance first and second mortgages, combining them into one. Approval is contingent on the age of the second and how much equity is in the home. Refinancing to combine first and second mortgages is often a great way to reduce payments.

How Many Times Can You Refinance Your Home? The process of refinancing a mortgage involves taking out a new loan and using the funds to pay off the existing loan. You can refinance with the same lender or work with a different one. Technically, there’s no limit to how many times you can refinance your mortgage.