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Advice if you want to Refinance 1st Mortgage Only - The Bills.com Blog
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Advice if you want to Refinance 1st Mortgage Only
Thursday, Feb 5, 2009
Question: I have a heloc with Citibank. I have a 5-year fixed interest only that expires in July so I have been starting to look in to refinancing. If i refi the first, what rights would I expect Citi to have? Can they call the heloc or prevent me from refinancing the first? The loan amount of the first will be the same as before or maybe even a little less. I would not be able to pay off the heloc at this time so I don't want to trigger something that would require me to do so. Based on a recent appraisal I had done, I have 20% equity after the first and second combined. But values are dropping every day so I am getting a little nervous. Thanks.
Answer: Yes, you can refinance your 1st mortgage
but, Citibank, the holder of the second has to agree to it. It's called subordination. Normally when a first mortgage is paid off the second moves into the first position unless the holder agrees to "subordinate" the second.
Basically, a subordination agreement is an instrument that allows a first lien or interest to be paid off and allows another first
Basically, a subordination agreement is an instrument that allows a first lien or interest to be paid off and allows another first
mortgage company to come in and be the first priority lien holder.
I don't think that Citi would create a problem for you unless it changes the equation of the loan substantially. In any case, I think you will be better off in refinancing both of these loans into a single fixed rate loan as you have ample equity in your home.
Best,
Bill
www.bills.com/blog/
I don't think that Citi would create a problem for you unless it changes the equation of the loan substantially. In any case, I think you will be better off in refinancing both of these loans into a single fixed rate loan as you have ample equity in your home.
Best,
Bill
www.bills.com/blog/
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