Home improvement - Either an equity second or over-equity second can be used for home improvement purposes ranging from minor repair to major refurbishing. In the case of an over-equity second being used for home improvement, a lender will normally require an estimate of work to be completed on the home, for amounts above $10,000. Some lenders may also require that the money borrowed be directly paid to the contractor performing the work.

Debt consolidation - Either an equity second or over-equity second can be used for debt consolidation purposes. Debt consolidation loans can be used to consolidate most any type of debt ranging from credit cards, school loans, and personal loans. When applying for an over-equity second for these purposes the lender will normally require direct payment to the debtor. Using a second mortgage for debt consolidation allows you to combine all amounts into one loan, with one more affordable payment.

Paying for college - Either type of second mortgage may be used for this purpose. Using a second mortgage to pay for schooling allows you to finance expensive educational costs over a comfortable period of time, at an affordable rate, using the value in your house. When borrowing using an over-equity second, for this purpose, the lender may require direct payment to the learning institution.

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