Apply for one more mortgage (second mortgage) loan on the same property. This is similar like a mortgage but this mortgage has a lien position subordinate to the first mortgage. All criteria part has to be fulfilled to this mortgage also like as it is in case of first mortgage provided the equity of the collateral has to be qualified for second mortgage. Equity of the collateral must carry the value so that the borrower can apply for second mortgage. As far as lender is concern it carries bit more risk because he has to suffer from both the mortgages if anything goes wrong with the borrower although he has taken care of appraisal value and all processing part. Any settlement regarding the claims goes first preference to the first mortgage and second mortgage considers as subordinate to the first.There are some cases where more than one loan has been allowed on the same collateral. Whenever a loan registers in a country or city first one registers as first mortgage and if second loan registers it will be called as second mortgage. Some times in a very rare case a property can be utilized for third or fourth mortgages also. All installments and interest rates charges will be different and terms and conditions are also different on both the mortgages as per the Promissory note agreement. Any future claims or in case of bankruptcy file the proceedings will be started to the first mortgage then the preference goes to the second mortgage.
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