The first mortgage is the big loan you get to purchase your home. Typically a second mortgage (or third) is a smaller loan for a shorter period of time for closing cost assistance or possibly a downpayment. The reference to first or second or third is to their legal priority. The first mortgage is in first position to be paid if there is a default. When a first mortgage is paid off, the loan that is in second position automatically becomes first unless it is paid off or subordinated to another first.