Advantages & disadvantages of a second mortgage

by Eileen Gilroy 01/21/2024

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

Eileen Gilroy

Eileen is a Licensed Real Estate Salesperson and has been in the industry since 2004. Her experience in home sales range from a $4,000,000 single family home to a $100,000 Co-op. She covers both Westchester and Putnam County and works with both buyers and sellers.  "My love for Westchester and particularly the Hudson River Valley is one of the many reasons why I enjoy working in real estate". She is a lifelong resident of Westchester County. She grew up in Tarrytown and moved to Briarcliff Manor where she raised her family. She received her MPA from Pace University and worked many years in the Human Resources field. She held the title of Vice President of HR for the largest teaching hospital in Westchester and Director of Classification and Compensation for one of the largest employers in Westchester County. After a successful HR career, Eileen decided to retire to make a full time commitment to her real estate clients. Outside of work you can find Eileen on the Tennis, Platform, or Pickleball Court along with Hiking in Westchester or the surrounding counties.