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 is leading to a higher rate of interest. You may also find that you have to carry PMI with the refinanced mortgage.

Will Refinancing Benefit You?

Refinancing two mortgages enables you to consolidate your loans into a single payment that often lowers your monthly bill. You may also find lower rates under the right circumstances.

Large equity holders 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. You will also have to pay for private mortgage insurance with less than 20% equity. Even with these factors, you may still find that you will save money by refinancing.

Did you check around with more lenders?

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. With an online mortgage calculator, you can 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.

Although a second mortgage usually qualifies for higher rates, you have the option of locking 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.

This article was written with the support of Las Vegas mortgage , Chicago Mortgage , and Irvine Mortgage