Yeah my family wasn't financially sophisticated either, but they also didn't do anything monumentally stupid either; which is more than I can say for some I know and counts for a lot.

I know of "second mortgages", but assumed they were a last resort if money was needed quickly.

They used to be. Then housing costs started going up and interest rates started going down, and people discovered that it was a lot of cheap money they could tap into.

I bought my first house as a foreclosure from someone who bought it and two others on the block with the goal of juggling lines of credit between the three to flip them. Then the housing market blew up, and so did his little venture.

Personally I treat my house as the one thing that literally keeps me from being out on the street, so I try not to do anything clever with its finances.