A second mortgage loan can help you finance a great many things that you or your family needs, like a new car, a college education, or even a home remodel. With credit card interest rates high, you can save money by putting the equity in your home to good use, and buy whatever it is that you need, while avoiding higher interest rates for car loans or college loans. If the remodeling project is to install energy efficient heat pumps, air conditioners, or furnaces, check to see if there are tax rebates you will be eligible for if you put in energy star equipment.

A second mortgage loan can either be a fixed rate loan or an ARM. If you get a second mortgage loan with an ARM, make sure that your lender explains everything about that loan to you, otherwise you could be caught down the road with payments on the second mortgage loan that will increase beyond what you can comfortably afford. A fixed rate loan is usually the best way to go with both the first mortgage and the second mortgage when interest rates are low, as they are now, because there will be no surprises.