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How to Refinance having a Second Mortgage

The decision to refinance a second mortgage loan should never be taken casually. Yes, of course its another way of acquiring extra cash but it also means acquiring a fresh loan. You need to make sure that your 2nd mortgage would not merely come with surplus cash but better loan charges and terms also.

Why You Should Refinance having a Second Mortgage
Not every situation would guarantee refinancing and not every financial need could be solved with a second mortgage. You need to take into account every factor and cost involved in the process prior to making your decision. Listed below are a few excellent reasons that will merit refinancing having a second mortgage.

You can forget Private Mortgage Insurance
Private mortgage insurance could have been assessed on your first or perhaps existing mortgage but when you refinance having a second mortgage, you can avoid paying for May. Unknown to many, private mortgage insurance is quite a costly expense. You may not discover it because it would be able to be included in your monthly premiums, but PMI costs thousands of dollars every year. Thats money lost and not well-spent!

Consolidate Just about all Mortgages in One Loan
Through refinancing with a next mortgage, you can merge your existing mortgage loan and maybe even some other debts into one easy loan. Of course, this would only be beneficial if your second mortgage comes with much better rates and phrases. Shop wisely!

Better Rates and Phrases
Had times recently been especially tough when you acquired your first mortgage loan? That could be the reason why your current interest rate is unusually high? But todays market is different and there may be a low interest rate rate mortgages you can now take advantage of. With low interest rates, youll be able to ensure reduce monthly payments as well.

How about the terms of your present mortgage? Are you pleased with it? If not, you can refinance using a next mortgage with conditions that match your current financial needs. If your first mortgages due to expire this year but you havent yet enough money for the balloon payment, you can remortgage with a second mortgage to settle the last payment and rest easy having a longer loan term.

Spend, Cash Back
Last but not the least, refinancing having a second mortgage will provide you with extra cash. The amount of surplus cash available will of course depend on simply how much youll borrow and the sum you have to pay to settle the existing mortgage.

But thats not the end than it. If, for instance, you determine to sell your home, you should use part of the proceeds to settle your second mortgage. Had you been lucky to get the best re-finance mortgage rates then youll possibly have extra cash once more after closing your loan.

How to Refinance with a Second Mortgage
When youre convinced about the rightness of refinancing then heres list of positive actions to refinance using a second mortgage.

Step 1 Improve or repair credit ranking.
Its the only way to make you qualified to receive the best mortgage re-finance rates. You can do this on it’s own or you can acquire the services of a credit repair business.

Step 2 Shop for charges.
Know which businesses offer the lowest rates and what their requirements are in go back. Know the costs involved and which of them might be waived in your favor.

Step 3 Use.
Make sure you read the conditions and terms of your second home loan before signing up regarding anything!

Comments: 23

  1. Cleveland August 9, 2013 at 1:49 pm Reply

    Looking for some lenders that will finance condo hotels under 400 sqft.

  2. Meagan September 7, 2013 at 3:42 am Reply

    Should I sink all my cash into a house or carry a morgage and diversify my investments?

  3. Eusebio September 13, 2013 at 9:17 am Reply

    I’m getting a mortgage loan through a mortgage company but the guy that is giving me the loan seems a little bit to excited. How much money is he making off of the loan of 170,000 and what should I look out for?

  4. Lynnette October 5, 2013 at 3:16 pm Reply

    What is the best mortgage company to get a loan modification through? Easiest mortgage company? I would like to know!

    THANKS,
    Greg

  5. Cleveland November 13, 2013 at 10:55 pm Reply

    Or will lenders require me to refinance both?

  6. Tiffaney November 15, 2013 at 12:03 am Reply

    Most people keep telling me I have to wait 2 years before I can get approved for a mortgage loan. Does anyone know a lender that will do it before the 2 years is up?

  7. Patsy December 17, 2013 at 9:22 pm Reply

    My wife and I along with my 2 year old daughter have out grown my tiny house and are looking to add a 2nd floor, but I have no idea where to start.

  8. Sharolyn January 9, 2014 at 12:44 am Reply

    My husband and I are currently paying PMI (Private Mortgage Insurance) on our mortgage. (We have no second mortgages.) I know we need twenty percent equity in order to eliminate PMI, but I don’t think we’re quite there. Is taking out a home-equity line of credit to pay down the mortage a good idea? I know that we’d then have two loans to pay, but the PMI would be eliminate and all of our payments (minus the interest) would be going toward the loan rather that insurance. Is it possible to get a home-equity line of credit for 6%?

  9. Charlsie January 14, 2014 at 6:12 am Reply

    I currently pay 6.25% on my mortgage and it is interest only. I am able to get a better rate (3.25%) but now I would have to pay Private Mortgage Insurance. Does anyone know if PMI is tax deductible? I’m trying to figure out if it is worth it come tax time

  10. Mari January 15, 2014 at 4:42 pm Reply

    has anyone ever used the 203k from HUD. it looks like a good program to buy and fix up properties and sell if you don’t have much money. has anyone used this?
    Thanks
    Jim

  11. Morgan January 20, 2014 at 7:21 am Reply

    i was told my Wells Fargo whom i currently have my home loan with and when i asked them about the program they said that i did not qualify because i have private mortgage insurance.

  12. Ines February 6, 2014 at 8:17 pm Reply

    what should i be looking for and who are reputable providers

  13. Granville February 21, 2014 at 3:33 am Reply

    In May of 2003, my husband and I bought a house. We got an 80/20 loan to cover the cost. 80% of the loan is a fixed 5.25% rate. 20% of the loan started at 6.25% and currently sits at 9.25&. The loan is going to readjust next May. Is the 20% loan considered a second mortgage? How can I refinance it now and get a reasonable rate? My husband and I have near-excellent credit.
    P.S. as a side note, the house we have the mortgage on is currently worth roughly $20,000 less than we paid for it, so rolling the loans together is out of the question.

  14. Emmett February 22, 2014 at 2:14 am Reply

    option with fair payments.ive already signed purchase own new home.but i still have to sell old one.

  15. Iris February 22, 2014 at 4:06 am Reply

    I would like to know if there is a company who will refinance second mortgage after the house being purchased a month. If they do it will they do the price up the appraisal instead the price of the last month purchased. I like to do stated income and stated asset program.

  16. Trudi February 22, 2014 at 9:11 am Reply

    At today’s current interest rates (fixed rates), what would be my monthly mortgage payment on a $175,000 mortgage, and a $300,000 mortgage (refinance/second mortgage). We are currently coowners in the house and want to buy the other siblings out.

  17. Corie February 25, 2014 at 3:40 am Reply

    It was my understanding it was meant to insure against the buyer’s default. If so, then obviously a buyer still suffers the consequences if he doesn’t pay the mortgage, but wouldn’t the lending bank still remain healthy?

    I’m only asking, because PMI seems to serve no purpose in this shaky market. It seems like having an insurance company that doesn’t cover the only situation it’s meant to cover.

  18. Domingo March 13, 2014 at 11:06 pm Reply

    A family member was just attempting to get a home loan and they started adding all kinds of “fees” in. One of which was Mortgage Insurance which was over $100 monthly. And NO I’m not referring to Home Owners Insurance, that was yet to be added on. Is this a real thing? Because none of us had ever heard of it and quite frankly thought it sounded like a scam.

  19. Giselle May 22, 2014 at 1:32 pm Reply

    And for how long??????/

  20. Vernon May 28, 2014 at 4:26 pm Reply

    First mortgage=$405K. Second Mortgage $120K. One lender, both refinanced. Second mortgage foreclosed and sold property at trustee sale June 2009 for $120K to “REO…”. Left property December 2009. BK Ch 7 discharged 8/10. Now found out that first mortgage sold property again at another trustee sale held September 2011 for $470K to “Bank of …”.

    I’m very confused. So many questions:

    1. When the 2nd foreclosed, it owned the property with the 1st still attached. In order to get title, it should’ve bought out the first so 1st doesn’t foreclose?
    2. Can the 1st foreclose, more than 2 years after the 2nd completed their trustee sale?
    3. This second foreclosure has been reported on my credit report. So now, I have a foreclosure in 2009 (2nd) and now 2011 (1st) for the same property. Can they do that?
    4. How many foreclosures can there be by one lender on one property on one set of loans of one borrower?

    Thanks for any input. Any one in this situation?
    To this kid…you obviously did not read the entire post and misunderstood the questions.

    From doing some research, I found out that when the first forecloses, any junior liens gets wiped out, it does not get bought out like you misunderstood.

    In my situation, the second mortgage foreclosed NOT the first. I’m trying to get an answer on what was supposed to have happened to the first when it was the second that foreclosed and sold the property in a trustee sale. My understanding was that the second should have paid off the 1st first before taking money left over (which was $0) for themselves.

    And are you saying that lenders can foreclose as many times as they want on one property, on one loan as many times as they can? That was a smart *ss answer that does not make sense at all.

  21. Kylee May 28, 2014 at 4:26 pm Reply

    They really don’t lose any money at all right!!?

  22. Eugene June 3, 2014 at 10:19 am Reply

    Cost of my house: $41,000. Mortgage? 30 years

  23. Yetta June 9, 2014 at 6:03 am Reply

    I’m supposed to be finished closing on buying a house next week.

    I was getting a mortgage through Bank of America, and was pre-approved.

    now, we’re down to finalizing the paperwork, and they JUST informed me YESTERDAY that i was supposed to have “Reserves” in my account (money equal to the amount of 2 months mortgage payments) .. but i dont have that money in my account.

    they said even if i could deposit that amount in my account tomorrow, it wouldnt matter b/c i needed to be able to show that it’s my own money, not a gift.

    so they said they might be able to make an exception, since i have 1/2 the required amount in my account. how often do they still approve loans with exceptions?

    if i dont get approved, i’ll lose the house i was supposed to be closing on next week 🙁

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