Second mortgages are types of mortgage loans that are subsequent to the original mortgage. Many times, homeowners use these loans to acquire extra cash for home improvements, debt consolidation, and other hefty expenses. If you are considering a second mortgage loan, there are three things you should know before applying.

Loan Terms Vary

Second mortgages have varying terms. Some mortgage loans have terms that last for as long as 15 to 20 years, while other loans require payment in as little as one year. Shorter terms come with higher payments. When comparing second mortgages, make sure you choose payment terms that suit your financial situation. If you doubt your ability to repay, you may want to consider second mortgages that have longer terms.

Interest Rates Vary

Though many second mortgages come with fixed interest rates, adjustable rates may be available. The interest rates that accompany second mortgages depend heavily upon your credit status. If you have good credit, the rate will probably be low. If you have bad credit, the rate may be high. Either way, you should be able to qualify for a second mortgage. Second mortgages are generally easier to obtain than first mortgages, because you already own the home.

Lending Fees May Apply

Many lenders offering second mortgages charge a fee for lending you money. Though the fee is typically a percentage of the loan, the amount of the fee will vary depending upon the lender that you choose. When shopping for second mortgages, take time to compare lending fees. This is the only way to ensure you get a good deal. If the lending fee on your second mortgage loan seems high, you can try to bargain with the lender. Some lenders are willing to waive the fee. If that won