What is the difference between a primary and secondary mortgage?

A primary mortgage is the most common type of mortgage used in Kansas. It occurs when a bank or other lender loans money to a borrower to purchase a house. The borrower then pays back the loan over a agreed-upon period of time with interest. A secondary mortgage differs in that it is used to borrow money against the equity in a borrower’s already existing mortgage. Equity is the amount of money the borrower has already paid off of their existing mortgage. It is essentially taking out a loan against the value of the borrower’s home. Secondary mortgages have a few advantages over primary mortgages. Interest rates are much lower than primary mortgages, as lenders take on much less risk when lending money against a home’s value as opposed to someone who has yet to purchase a home. This can be a great option for homeowners who need to borrow money but don’t want to sell their home. It also can give homeowners access to money quickly, as the process of obtaining a secondary mortgage is typically much faster than a primary mortgage. Primary mortgages are still the most common in the state of Kansas due to their affordability and widespread availability. However, if a borrower needs to borrow against their home’s value, a secondary mortgage can be an extremely useful tool.

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What is the difference between a primary and secondary mortgage?

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