Yes, whenever it is recorded behind an existing first mortgage: a home equity line of credit is secured by a junior lien on the same house, and a junior lien is exactly what the phrase second mortgage describes, though a line taken on a house with nothing else against it is a first lien instead.
The phrase second mortgage sounds like a loan on a second house, or like a lesser grade of borrowing. It is neither. It is a statement about lien position: the order in which claims against a title were recorded, and therefore the order in which they get paid. A HELOC is usually second in that order, and the rest of the answer follows from what being second means.
Second is a position, not a product
When a lender records a security instrument against a house, the recording date sets its priority. The loan used to buy the house records first and is the first lien. Anything recorded after it is junior: a second lien, then a third. In Nevada the instrument is a deed of trust rather than a mortgage, and a junior one is a second deed of trust, but people still say second mortgage and mean the same thing.
So a HELOC opened against a house that already has a purchase loan is a second mortgage. A HELOC on a house owned free and clear is a first lien, and calling that one a second is simply wrong. The product did not change. The position did.
Three products get called this, and they are not the same shape
Two of the three are second liens and the third is not, which is the distinction people are usually reaching for when they ask.
- A home equity line of credit. A revolving line with a limit, usually a draw period of five to ten years where the required payment is interest only or close to it, then a repayment period of ten to twenty years at principal and interest. The rate is normally variable, quoted as prime plus a margin.
- A home equity loan. One lump sum at closing, a fixed rate and a fixed term. Also a junior lien, also a second mortgage, and the payment does not move.
- A cash-out refinance. A new first mortgage large enough to pay off the old one and hand back the difference in cash. No junior lien at all, because the new loan replaces the first rather than sitting behind it, so it is not a second mortgage.
How much the two liens are allowed to add up to
The measure is combined loan-to-value: everything secured by the house divided by its value. Lenders commonly cap it between 80 and 85 percent on a primary residence, with some going higher at a price and most going lower on a second home or a rental. It varies by lender and by credit score, so any single figure is an example rather than a rule.
On a house appraised at $450,000 with $260,000 owed on the first, the equity is $190,000 but the borrowable part is not. At an 85 percent cap the lender will go to $382,500 across all liens, leaving $122,500 of line. At 80 percent it is $360,000 in total, or $100,000. Same house, same equity, $22,500 of difference from the cap alone.
What being second means when the money moves
In an ordinary sale it barely shows. Both liens are paid at closing out of the proceeds, first then second, and escrow orders a payoff demand for each. What catches sellers is that a line has to be closed as well as paid: a zero balance left open is still a live lien, and it has to be terminated before title clears.
In a foreclosure, position is the whole point. When the first lienholder forecloses it is paid from the sale proceeds before the second sees a dollar, and where the proceeds do not cover the first, the second is stripped from the title with nothing. A junior lienholder can foreclose on its own account, taking the house subject to the first, which is far less common because it means paying the first mortgage. Nevada's non-judicial process is a subject of its own.
Position is also why subordination exists. Refinance the first mortgage and keep the line, and the old first is released while the new one records later, which by the plain rule of order would put the HELOC in front. The line's lender has to agree to step back to second, and it is not obliged to.
Questions people ask
Is a home equity loan a second mortgage?
Yes, on a house that already carries a first mortgage. It is a lump sum secured by a junior lien, which is what the term describes. What differs from a HELOC is the shape of the money, a fixed sum at a fixed rate rather than a revolving line, not the lien position.
Is a cash-out refinance a second mortgage?
No. It replaces the existing first mortgage with a larger one that records in first position, so there is only ever a single lien. That is the structural difference from a HELOC or a home equity loan, both of which leave the first mortgage alone and record behind it.
Can you have a HELOC and a mortgage at the same time?
That is the usual case rather than an unusual one. The purchase loan stays in first position and the line records behind it, subject to the lender's combined loan-to-value limit across the two. Both payments are owed, and both are secured by the same house.