HELOC/Home Equity Loan question

[Anonymous]

Hypothetically, let's say I have a conventional mortgage with Lender A; for example an $80,000 loan on a $100,000 house.

Lender B offers 90%ltv home equity loans/lines.

• Can I just go to Lender B and take out a $10,000 equity loan or heloc without Lender A getting upset?
• Do I need to let Lender A know I'm further risking their asset?
• I imagine Lender B would do their own appraisal, is there anything else unique to the home equity loans?

Thanks all,

P.S. I'm not suggesting a piggyback mortgage as I realise my numbers could imply. I'm just trying to grasp how lenders "play" with eachother when effectively sharing collateral.

[StartingOver10]

Its not sharing as you imply, it is more like piggybacking.  The date of the mortgage and its recorded date are serial - first mortgage, second mortgage (or HELOC) etc

You can not take out two mortgages at the same time on the same collateral without each knowing about the other (that's fraud).  I assume you already have the mortgage for your hypothetical 80% and the next lender that would get you to 90% will require you to disclose it on the mortgage application.

Lenders have no problem with this from what I have seen.  But everything has to be disclosed to each lender. 

By the way, the first mortgage is still the most protected in your scenario even with the second behind them. 

[Anonymous]

Yes, the (1st) mortgage is already taken out.

I understand I'd need to disclose the 1st mortgage when applying for the second mortgage, but how do I go about letting Lender A (holder of the first mortgage) know about the second mortgage? Do I even need to?

If I understand your post correctly, you're saying my primary mortgage holder won't have a problem with the second mortgage?

Thank you,

[StartingOver10]

You don't have to notify your first mortgage about the second; it will show up in the public records anyway. I am assuming you have  a standard type mortgage and not a private mortgage or any type of specialized first mortgage, but read your note and mortgage for the first to verify that you don't have to notify them if you get a secondary loan.

[Anonymous]

That makes sense.

Thank you for your clarification!

[Anonymous]

No problem. The original lender will remain in "first position" anyway, so if you do default they will be the first to get paid.