The second mortgage is the company that is second in line to be paid when you sell your house.
A mortgage ties the note to the property.
When we sell our house, the second mortgage company will be paid after the first mortgage company has been paid in full.
Here’s an example:
Let’s say our first mortgage is $200,000, and our second mortgage is $100,000.
If our house is sold at a foreclosure sale for $200,000, then the first mortgage would be paid off and the second mortgage company would get nothing from that sale.
That doesn’t mean that the debt to the second mortgage company goes away, it just means that the mortgage becomes an unsecured loan.
Let’s say that our house is sold for $275,000 at the foreclosure sale.
In that case, the first mortgage company would be paid off, and the second mortgage company would get $75,000.
That leaves a $25,000 debt that we would owe.
Sometimes people ask, “Can my second mortgage foreclose on me?”
The second mortgage company can foreclose on you, however, they would have to pay the first mortgage company.
If you have any questions and you live in Alabama, feel free to call us at 1-205-879-2447.
I look forward to chatting with you!
Have a great day.