What is typically required to finalize a second mortgage?

Finalizing a second mortgage typically requires documented equity in the home. This is because lenders want to ensure that there is sufficient equity that can serve as collateral for the second mortgage. Equity is the difference between the home's current market value and the outstanding balance on the first mortgage. Without adequate equity, lenders may be hesitant to approve the second mortgage, as it poses a higher risk for them.

While other factors such as income verification and appraisals may play a role in the overall lending process, they are not specifically required to finalize a second mortgage. Income verification helps in determining the borrower's ability to repay, and a new property appraisal may be necessary in certain situations, but the key requirement for the lending decision regarding a second mortgage is the presence of documented equity in the home.