Advice on refinancing the primary mortgage when you have a 2nd m

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READER QUESTION

Can I refinance the primary mortgage without having to refinance the 2nd mortgage?

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Bills.com Resident Expert
Dec 12, 2011
BILL'S ANSWER

The ability to refinance your current first mortgage while keeping the second in place depends on the terms of the existing second mortgage.

You can refinance your primary mortgage as long as the 2nd mortgage company is willing to subordinate behind the NEW primary mortgage. A second mortgage gets its name from the fact that it is a subordinate mortgage to the primary mortgage and is in a second lien position behind the primary mortgage. A second lien position means that in the event of a foreclosure, the proceeds of the sale of the home would pay off the primary mortgage first, and the second mortgage second. Second mortgages may typically be taken out up to 85% of the appraised value of the home (meaning that the total loan-to-value of the primary and second mortgage add up to 85% of a home's market value). Most 2nd mortgage terms, however, state that in the event of any refinancing that the 2nd loan must be paid off in full before being subordinated to any new loan.

Since I do not know the value of your home, I cannot say how much you equity you will be able to pull out of your home. Your interest rate and loan terms will also be based on your credit rating, income, amount of the loan, and other factors. By speaking with various lenders, you can determine the maximum loan amount available to you, and how much you can expect to pay for various loans. I encourage you to shop around with several lenders to make sure you obtain the best loan terms possible. The Bills.com Savings Center is a great place to start as we can have several lenders contact you to discuss the terms they can offer. Please visit the loan page and find a loan that meets your needs at: https://www.bills.com/mortage/refinance/

I hope the information provided helps you Find. Learn. Save.

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Bill

www.bills.com

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