 TITLE: What Is a Second Mortgage? CONTENT: Types of Second Mortgages\n-------------------------\nThere are two main types of second mortgages:\n*   **Home equity loan.** With a home equity loan, you borrow a lump sum you'll pay back in a series of equal monthly installment payments over a repayment period, such as 10, 15 or 20 years. This type of second mortgage is often used for a single big-ticket expense (a roof replacement or a major renovation) for which the cost is known and fixed, and can be fully covered by the loan amount.\n*   **Home Equity Line of Credit (HELOC).** A HELOC is a type of revolving credit, with usage and repayment terms similar to that of a credit card: The amount you borrow establishes a credit limit against which you can make purchases by writing checks or using a debit card issued by the lender. You must make a minimum payment each month, but otherwise you can repay as much or as little as you like. As you pay down your balance, your borrowing limit is restored. You are charged interest only on your outstanding balance. A HELOC often makes sense if you're working on a series of home improvements, need to make sizable upfront investments in labor and materials for each, and can pay down those costs as you go. END