1st and 2nd Mortgage Refinance Loan

16 November, 2015

1st And 2nd Mortgage Refinance Loan

Refinancing a first and second mortgage requires some extra
considerations. Depending on your equity, you may find that
combining the two mortgages results in a higher interest rate.
You may also find that you have to carry PMI with the refinanced

Will Refinancing Benefit You?

Refinancing two mortgages allows you to consolidate your loans
into one payment, often lowering your monthly bill. You may also
find lower rates under the right circumstances.

Those with a large amount of equity benefit most from
consolidating loans since they qualify for the lowest rates. It
is important to look at interest savings, not just monthly
numbers which can be misleading.

However, if you have less than 25% equity, you may end up
qualifying for higher rates. With less than 20% equity, you will
also have to pay for private mortgage insurance. Even with these
factors, you may still find that you will save money by

Have You Done Your Research?

To see if refinancing makes sense for you, research mortgage
lenders. You can quickly go online and request quotes and terms.
Look at the different offers, and work out the numbers. An
online mortgage calculator can help you figure out monthly
payments and interest costs.

An easy way to compare cost is to first add up your interest
payments for both mortgages. Use this number to compare interest
payments with each potential mortgage.

You also need to factor in the cost of refinancing. Just like
with your original mortgage, you will have to pay fees and
points. You want to be sure that you can recoup these costs with
your interest savings.

Why Do You Want To Refinance Both Mortgages?

While refinancing both mortgages is convenient, you may decide
to refinance only one or both separately. With your main
mortgage, you can expect to get low rates.

A second mortgage will usually qualify for higher rates, but you
can lock them in. You may also choose to convert from a line of
credit to an actual mortgage. Again, you will want to
investigate financial packages before signing up with a lender.

About the author:

View our recommended mortgage Refi
lenders. Carrie Reeder is the owner of ABC Loan Guide, an
informational website about various types of loans.

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