An additional mortgage loan.
A second mortgage is an additional mortgage loan. It sits in the second position behind a first mortgage. This is commonly worded as the "second mortgage" because it ‘subordinates’ to the first mortgage.
A second mortgage can be originated at closing on a first loan transaction or opened as a ‘standalone’ down the line after the first loan has closed. When opened concurrently with a purchase or refi transaction, funds from the second mortgage can be applied towards the down payment for the home purchase, most often utilized to allow a buyer to avoid either jumbo financing or mortgage insurance. Alternatively, if the second mortgage is opened independently, it is called a Stand-Alone Second; under this scenario, the first mortgage is not impacted.