What is a Junior Mortgage?
A junior mortgage is a loan secured by the in a house. Equity equals the value of the house less the balance owed on the homeowner's first (or in some cases, preceding) mortgages. Junior mortgages are not the same as home equity lines of (HELOCs).
How Does a Junior Mortgage Work?
Junior mortgages are very similar in concept to traditional mortgages. For example, junior mortgages generally must be repaid over a fixed period. Some lenders may fixed rates on these loans; others might variable rates.
Why Does a Junior Mortgage Matter?
Junior mortgages can be viable options when compared to unsecured loans. In addition, mortgage interest is tax deductible, making the interest rates on junior mortgages sometimes lower than they appear when one considers the tax savings.cards or other high-interest,
However, not all junior mortgages are created equally. Borrowers are well served to compare fees, interest rates and terms among . After all, when a borrower defaults, his or her home could end up belonging to the bank for good.