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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 111659
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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I am a New Hampshire homeowner and I would like to take out

Customer Question

I am a New Hampshire homeowner and I would like to take out a loan with a family friend in order to receive better terms than a commercial lender. The lender would prefer to have the loan secured by a lien on my house (also lowers the interest rate), so I believe that this would be similar to a "second mortgage"? But I believe that NH is a "title theory" state and my first mortgage is similar to a deed of trust held by a title company. So can we simply write up a promissory note and a simple mortgage document together and file with my local NH registry of deeds to create the lien, or would we need to get a third party/title company involved and write up a second deed of trust? Also, would this make the interest on this loan tax-deductible?
Submitted: 19 days ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 18 days ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Yes, the second mortgage is filed with your deed as well in the recorder of deeds office. You have to write a promissory note and security agreement which is where you promise your house as security for the second loan. Your first mortgage though would always prime the second one, meaning in case of any financial issues and any foreclosure the first mortgage holder would get paid first before the second.
If this is a home equity loan, based on the amount of value in your home that is not under mortgage, then the interest would be tax deductible