Second Mortgage

Definition:
funding that provides an additional source of financing usually in conjunction with a new first loan.


Examples: Coming soon.

Secondary financing in the commercial industry is not as common as in the residential arena. In almost all cases a 2nd loan is provided simultaneously by the lender of the first loan.


Typical Commercial 2nd financing involves interest only payments between 3 and 5 years. It will generally reduce the loan-to-value of the primary mortgage, while provide tax deductions of the second mortgage.


Commercial 2nd financing is often sought after by a borrower who believes the property will appreciate in value, which would then allow a refinance in order to consolidate two mortgages into one fixed rate long-term mortgage.