Refinance Three Mortgages

Refinance Three Mortgages

I have three mortgages and want to refinance. Can I refinance, and is now a good time?

We have a home valued at ~$400,000. We owe ~$262,000 @6.125% on the 1st mortgage and have a LOC which we have a balance of $72,000 @3.25% and an equity loan of about $40,000 @ 7.25%. I cannot get the bank to lower the equity loan rate and really don't want to have to pay closing costs on a refi. Closing costs not including pre-paids about $5,000, mid-700 credit score, steady 2-income total of approx. $100k, and plan to remain here. Am I really better doing a refi at the current interest rates? Do you have an alternative idea?

the answer to your overall question, "should i refinance?" depends on the answers to the following questions:

  1. are the second and third liens fixed or adjustable?
  2. is the total amount owed 374,000?
  3. what type of loan is your current first mortgage and how many years old is the first?
  4. what type of first mortgage are you looking to refinance into a 30-year fixed?

basically if the second and third mortgages are adjustable it would be something you should consider strongly. if you truly owe $374,000 and the house is going to appraise for $400,000, you will be at a 93% loan-to-value (ltv), which would mean you would have to pay mortgage insurance (pmi).

will you save money with a refinance? difficult to say without seeing firm numbers. one thing that gives me pause is your 93% ltv. also, i am not aware of any investors who will consider a refinance on a third mortgage.

this is perhaps the only situation in life where shopping is the solution to your problem. go to the savings center and get no-cost quotes from pre-screened lenders. to learn more about mortgage refinances, see the article, pros & cons of refinancing a mortgage.

i hope this information helps you find. learn & save.