Typically second mortgages fall into one of the two following categories:

Equity seconds - Equity seconds are second mortgages that use the equity you have in your house as the basis upon which a lender loans you money. Most lenders will require an appraisal in order to establish your house's value and the equity contained therein. Borrowing with an equity second normally allows you to obtain a better rate due to the fact that the money borrower is secured on property you have ownership in.

Over-equity seconds - Over-equity seconds are second mortgages that lend you money over and above the value of your house. Over-equity seconds are commonly known as "125's" or "115's" because they allow a lender to loan you money at 125% or 115% of your house's value. Requirement of appraisal is based upon the amount of money borrowed. Typically, if you plan to borrow over $35,000 on an over-equity loan, an appraisal is required. Borrowing with an over-equity second allows you to obtain a loan when a personal loan may have not been possible.

Most common uses of second mortgages:
- Home improvement
- Debt consolidation
- Pay for college