What is the difference between a primary and secondary mortgage?

A primary mortgage is the first loan taken out on a property. It is the loan taken out that initially allows the purchase of a home. Primary mortgages are typically issued by banks or other financial institutions, and the terms of repayment are usually between 15 and 30-years. A secondary mortgage is a loan that is taken out after the primary mortgage has been paid off. These loans are usually used to finance home improvements, consolidate other debts, or simply to free up some extra cash. Secondary mortgages often have higher interest rates than primary mortgages and may be taken out through different lenders. In the state of Virginia, it is important to have a clear understanding of the differences between a primary and secondary mortgage before taking out either type of loan. Virginia law establishes the rights of both borrowers and lenders, and it is important to be aware of all the terms, including repayment terms and interest rates. Individuals should also research multiple lenders to get the best rate and terms available.

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What is the difference between a primary and secondary mortgage?

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