1. Most seconds are put in place instead of having a higher first loan with mortgage insurance.
2. Many times the payment on the 2nd loan is actually less than the mortgage insurance payment would have been.
3. Many seconds are HELOC products, which can be paid down and reborrowed on later at a rate lower than most credit cards, and used for things like home improvements.
4. Often the interest on a 2nd mortgage is tax deductible (check with your cpa to confirm)
5. The primary reason clients will use a second mortgage is to purchase property with a lower downpayment. This allows them to become homeowners sooner, benefit from current low interest rates on the first loan, and start benefitting from the home interest tax benefits.