Definition of a Stand Alone Second Mortgage - How It Works
A “Stand Alone Second Mortgage” is a generic term for any type of additional mortgage loan on a property that is not used for the specific purpose of initially buying the property (often referred to as a Piggy Back loan). These additional loans are most often used by the home owner for personal consumer debt consolidation and getting some cash out of the property for other personal use.
Since the Stand Alone Second is usually obtained some time after the home owner has had the property, it is a logical conclusion that the homeowner made a significant initial down payment on the property, or real estate values in his area have risen. It is unlikely that a homeowner would be able to apply for this type of financing immediately after purchasing a house because the equity in the property acts as the collateral for the loan.
