Major pros & cons of a second mortgage

by Lee Joseph 01/11/2023

Major pros & cons of a second mortgage  featured image

A second mortgage grants homeowners the ability to borrow equity from their home to gain financing. These funds can be used to pay bills, enhance the property and more. 

The second mortgage is connected to the equity your current mortgage has built up, so it’s crucial to understand the ins and outs of a second mortgage before deciding to use it. 

Advantages & disadvantages of a second mortgage


  • Lower interest rates in comparison to standard lines of credit. 
  • More financial wiggle room to invest in larger home renovations. 
  • You can use your homes’ equity without having to refinance the original mortgage. 


  • Your mortgage lender may require a high credit score and debt-to-income ratio to qualify. 
  • Your home may be at risk if the home equity line isn’t paid back within contract guidelines. 
  • If you decide to sell your home, you may make less profit. 

How do I get a second mortgage & what should I expect?

To take out a second mortgage loan, most lenders require a decent amount of equity to be built up on your home which is the amount you’ve paid towards the principal balance (the cost of the home plus interest). 

After taking out the second line, you’ll need to have at least 20 percent equity still built up on your home. If you need this money fast, please note, it takes a few weeks for lender approval and the loan comes with fees. 

If you’re unsure a second mortgage is for you, speak with your lender to explore your options and make adjustments as needed.

About the Author

Lee Joseph


This is my 37th year in real estate and I love what I do! I enjoy making the American Dream of home ownership a reality. I believe in always being on the cutting edge of anything new in my industry and as a result, hold the national designations of ABR (Accredited Buyer Rep), CRS (Certified Residential Specialist), and SRES (Senior Residential Specialist). I received the Natalie Quinlan Distinguished Service Award in 2017, Realtor of the Year Award in 2013 and the Realtors Choice Award in 2010. I currently hold the Coldwell Banker President's Elite Award and the Central Massachusetts Association of Realtors Diamond Level Award. I believe in giving back to our industry and serve on many committees for RACM including Professional Standards (which I have also Chaired), Nominating Committee and Strategic Planning. I am currently President Elect and a member of the Executive Team. In the community, I am on the Board of Directors for Boys and Girls Club and Chair of Board Development Committee. I also enjoy supporting the performing arts and especially the Hanover Theatre. As Founding Members, my husband and I sat on various committees and enjoy attending as many performances as we can. I am a Shrewsbury resident and have raised two daughters who have enjoyed and benefited from an education from the Shrewsbury Public School system. I practice seller and buyer representation, new construction, and relocation.

Lee Joseph, ABR, CRS & SRES