Second Mortgages

Second mortgages (HELOCs and Closed-End) offer homeowners creative solutions to their financial situations.

By taking out a second mortgage on their home, borrowers can turn existing equity into cash to consolidate debt, fund home improvement projects, contribute to an investment home purchase, or build a secondary unit.

The second mortgage also offers owners creative solutions to financial problems. We have seen second mortgages (also called “second liens“) used to pay down first mortgages and eliminate mortgage insurance. We have seen owners use a second mortgage to keep a desirable first lien intact while cashing out equity to use for other purposes, such as college tuition.

Central Coast Lending is able to lend on an assortment of second lien situations, which can help borrowers consolidate debt, fund home renovations, or take out a new line of credit.  Give us a call at 805.543.LOAN or an email with any questions.


The two main components of any home loan are the “promissory note” and the “deed of trust.”

The promissory note is essentially a contract that contains a pledge to repay the loan amount and the terms for repayment (which includes interest rate, loan term, loan amount, etc).

The deed of trust – also called a “mortgage” or “lien” – states that the home may be used as “collateral” for repayment of the loan; in the event of payment default, the lender is able to foreclose on the property, sell it, and retain the proceeds to satisfy the debt in question.

Every lien has a “position” or “priority.” All home loans have at least one position – “first position.” The lender in first position gets the first crack at recouping its losses in the event of payment default.

It is possible for borrowers to take out additional liens (mortgages) on a home. All subsequent liens are “subordinate“, which means that the lender in secondary position must wait to be made whole until after the first is finished. You might also see this referred to as a “second lien“, a “second mortgage“, or a loan in “junior position.”

Subordinate financing can be structured in two ways:

1) The Piggy-Back (a.k.a.: Concurrent Lien, First and Second Combo)
Borrowers purchasing a home, are able to use a “piggy-back” their first mortgage in with a second mortgage to give them additional flexibility in the formation of their repayment plan.

2) The Standalone Second
Borrowers can also take out a second lien independent from the first. In doing so, the borrower can take cash out of their equity to use for other purposes while preserving their first lien.

The HELOC is a revolving line of credit that allows homeowners to turn home equity into cash for ready use. Some of the best uses of a HELOC allow borrowers to free up cash for debt consolidation (credit cards, car, student loans) and home improvements.

Click here for more information. 

The closed-end second lien sets a fixed interest rate and a specific payment schedule. This format offers security for borrowers with a plan that they can reliably execute.

Click here for more information. 

  • The second mortgage makes a comeback. (Read More).
  • Home Equity Line of Credit (HELOC) explained. (Read More).
  • The closed-end second lien explained. (Read More).

Further Reading (from the FAQ Page)

  • Low down payment loan programs (Read more)
  • Gift giving guidelines (Read more)
  • Mortgage insurance guidelines (Read more)
  • Credit qualification standards: FICO and Debt-to-Income (Read more)


Apply Now

Submit your loan application today! Track status and make modifications on-the-go. Easy, fast, and secure.

About the Loan Programs

As a bank and a broker, we find loan solutions where other lenders cannot.

Market Update Blog

Daily updates on Central Coast real estate, economic activity, lifestyle, and much, much more. Read more.

From our Clients:

“Good explanation of process and forms. Always kept up-to-date during the loan processing.”
Anthony and Kathleen Toscano, Morro Bay
“Communication through telephone and emails was excellent with updates…”
R. David and Helen Cantu, Atascadero
“The speed and ease of communication… always flexible to accommodate our schedule.”
Berkeley and Meghan Lindt, San Luis Obispo
“Our transaction was complex due to various family entities. It was difficult but successful. Great job!”
Donald and Elisa Cameron, Cambria
“This was a painless process and you succeeded where conventional banks failed me.”
Susan Manbeian, Cambria


We will close your home loan on time, on budget, with no surprises. Find out why we call ourselves “The Mortgage Experts.” About CCL
As a banker and a broker, we have uniquely positioned ourselves to custom fit a loan for every client. We succeed where others do not. Apply Today
As  a mortgage banker, we keep your loan right here in California. Our offices are conveniently located to serve the Central Coast. Office Locations
Check for daily updates on mortgage rates, home price trends, new home construction, and more. The Central Coast’s best real estate analysis. Market Update Blog



Central Coast Lending Reach

We offer home loans / mortgages to the Central Coast and the entire state of California, including:

San Luis Obispo County:

Arroyo Grande, Atascadero, Avila Beach, Cambria, Cayucos, Creston, Grover Beach, Los Osos, Morro Bay, Nipomo, Oceano, Paso Robles, Pismo Beach, San Luis Obispo, San Miguel, San Simeon, Santa Margarita, Shandon, Templeton, and surrounding cities.

Santa Barbara County:

Buellton, Carpinteria, Goleta, Guadalupe, Hollister Ranch, Isla Vista, Lompoc, Los Alamos, Los Olivos, Mission Hills, Montecito, Orcutt, Santa Barbara, Santa Maria, Santa Ynez, Solvang, Cayuma, Vandenberg Village, Garey, Summerland,  and surrounding cities.

Kern County:

Bakersfield, Delano, Arvin, California City, McFarland, Ridgecrest, Maricopa, Taft, Oildale, Lamont, Rosamond, Rosedale, Greenfield, Shafter Lost Hills, Wasco, Bear Valley Springs, Boron, Frazier Park, Wofford Heights, Weedpatch, and surrounding cities.

Monterey County:

Carmel, Del Rey Oaks, Gonzales, Greenfield, King City, Marina, Monterey, Pacific Grove, Salinas, Sand City, Seaside, Soledad, Bradley, Castroville, Chualar, Las Lomas, Lockwood, Moss Landing, Elkhorn, San Ardo, San Lucas, Prunedale, Pajaro, and surrounding cities.

Real Estate Reports

Our quarterly reports on the Central Coast real estate market feature data on sales, pricing, foreclosures, and more.