Understanding a 2nd home loan.

new low rates and a competitive banks market have made a lending environment where some banks are approving 2nd mortgages that, when mixed with first mortgage balance, is totaling as high as 130% of the home value. If there isn't enough cash from the sale of the home, the second mortgage doesn't get paid.

The interest is added to the principal loan balance every month.

Interest on reverse mortgages isn't deductible on tax returns till the loan is paid off in part or full. If there isn't enough cash from the sale of the home, the second mortgage doesn't get paid.

When determining the interest rate a lender is ready to loan cash out for a home loan, he looks at risk level to him for loaning that cash.