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:
- are the second and third liens fixed or adjustable?
- is the total amount owed 374,000?
- what type of loan is your current first mortgage and how many years old is the first?
- 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 bills.com savings center and get no-cost quotes from pre-screened lenders. to learn more about mortgage refinances, see the bills.com article, pros & cons of refinancing a mortgage.
i hope this information helps you find. learn & save.