justin narin asked:


If you have both a first and second mortgage, or a first mortgage and a HELOC, you have the option to refinance the second mortgage, the first mortgage, or combine both mortgages into a single loan.

Refinance a Second Mortgage Only

The simplest option for refinancing a second mortgage with a high adjustable or fixed rate is to contact your current lender about refinancing to a lower fixed rate loan. If you’re payments have been on-time and you have good credit, your lender may offer you a streamlined loan that requires less paperwork and time and includes fewer costs. If your lender doesn’t agree to a streamlined loan, you should be able to find other lenders who are willing to offer you good terms and a good rate.

Refinance a First and Second Mortgage Together

If you’d prefer the convenience of a single payment and combining both loans into one would save you significant money, you can refinance both loans together. In order to qualify for the best rates, some lenders require you to wait a year after receiving the second mortgage before refinancing it. Your home may also accrue additional equity during this time, which will help ensure that your new loan and settlement costs don’t exceed the value of your home.

You can refinance a first mortgage and either a home equity loan or HELOC into a single new first mortgage. Before you do, compare your potential savings to your costs. If your first and second both have low fixed interest rates and there isn’t a large gap between those rates, refinancing may cost you more than you’d save.

You should also consider how much time you have left on your first loan. If you’re less than ten years away from paying off the first loan, refinancing could actually cost you more because most of your payments are going toward the principal balance rather than interest. Unless you can afford to complete paying both loans in the same time frame as your original loan, this may not be a good option.

Refinance a First Mortgage Only

If you have both first and second mortgages, it is possible to refinance just the first, but it isn’t easy. Your first mortgage is the mortgage listed first with the registrar. When you refinance a first mortgage, any other home loans move up in line, so your second automatically becomes your first. In order to refinance your first as a new first, your second lender must agree to continue subordinating their claim. Some lenders refuse. If your lender refuses, your only options are refinancing both mortgages into one new loan or refinancing both mortgages separately into two new loans.

Before refinancing any mortgage, carefully consider your options. Use refinancing calculators to compare costs and savings from all three options and then make the most financially beneficial decision that your lenders will permit.

For more article on Refinancing Second Mortgage, visit http://www.bills.com/refinance-second-mortgage/