what is a 2nd trust deed?
- 1 decade agoFavorite Answer
i think you mean a 2nd loan? so a person who has a 1st and 2nd loan on their house typically has 100% financing because they did not put down 20% of the purchase price. an 80/20 loan is a 1st and 2nd loan to make up for not having a large downpayment.Source(s): real estate licensed
- liberal_60Lv 61 decade ago
For all practical purposes Trust Deeds are like mortgages. A 2nd trust deed is like a 2nd mortgage. It is 2nd in the sense that it is second in priority to a 1st trust deed.
Both trust deeds and mortgages are used pledge the land and house as security in case you don't pay your loan. If you have a 2nd trust deed it means you have 2 loans and both are secured by the land and house.
If you fail to pay and the lenders foreclose, then the lender with the first trust deed gets paid his loan first at the foreclosure sale, after the expenses of the sale are paid.
If there is any money left over after the expenses and the lender with the first trust deed are paid, then the lender with the 2nd trust deed gets paid the amount of his loan. If there is any money left over after both loans and expenses of the sale have been paid (unlikely unless you have made payments for years or paid a big downpayment), then you would get the balance.