What is the difference between a 1st mortgage, 2nd mortgage, and home equity loan?
The # denotes seniority/position in chain of title. A first mortgage is a loan secured by the property that is in 1st position and gets paid what is due them first if the property is sold (municipal liens like property taxes are TRULY first, though).
A second mortgage is a loan that has a "junior" position behind a first mortgage. Home equity loan is just a colloquial term generally applied to second mortgages. A HELOC, or Home Equity Line of Credit (as mentioned by another responder) is a TYPE of home equity loan that acts more like a credit card in that you can draw on the equity as needed and pay it back and draw on it again and again during the "loan" term.
Technically you can have 3rd, 4th, 5th, etc. mortgages and any of those could be a "home equity" loan in that they would be loans secured by remaining equity in the property, but that would be highly unusual on a residential property.
1st mortgage is the one you got when you bought the house. The mortgage company that is on the deed with you. Second mortgage is usually from a different lender. In foreclosure the 1st mortgage holder takes back the house, the 2nd gets paid if there is any money left.
Home equity is a loan using the equity in your home as collateral. The terms of the loan are shorter and the rate usually a bit higher.
Home equity involves no closing fees in securing the loan.
Shop around a bit more. Try the bank where you keep your accounts.
You really want the cheapest and shortest loan you can get. Remember at this time we are not creating any equity in anyones home.
1st mistake is using lending tree, you are going to be pestered for months . the differences are the lien position, a heloc is a 2nd mortgage. best advice is go to your local bank and have them go through all your different options. Don't use a broker
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