A second mortgage is a loan against the equity in your home. Financial institutions will generally let you borrow up to 80 percent of the appraised value of your home, minus the balance of your original mortgage.
You may incur all the fees normally associated with a mortgage, including closing costs, title insurance and processing fees.
Home improvement loans are often written as second mortgages. And sometimes you can get a college tuition loan by using a second mortgage. In case of default, the loan is paid off from the proceeds of the sale of the property, after the first mortgage has been paid off first.