Can I Refinance a 2nd MortgageMay I refinance a 2nd mortgage?
May I refinance my second mortgage?
Requesting refinancing of your second mortgage is similar to requesting refinancing of your first mortgage: you must file a complete request with a creditor who will offer second mortgage on your kind of ownership in your area. Your creditor will check whether your loan, your earnings and your home comply with their policies and they will either renew or refuse you the loan (a refinancing) on the basis of their results.
Funding your second can be more challenging than your first, but in an area where house prices have dropped or sunk. Shrinkage in the listing of creditors willing to prolong second mortgages to homeowners has been substantial in recent years, and if you have more than 80-90% of the present value of your home (both loan combinations) to thank for, there may be very few creditors (if any) offering a funding program for second homeowners.
If a creditor is in the "second" or third or forth place, its location is naturally more risky than that of the first creditor. Should you stop making payment and the house had to be bought or sealed off, the second creditor would not get any compensation until the first creditor was fully repaid.
Often, after a troubled sales and legal fees of the first creditor, nothing remains - and the second creditor looses everything or almost everything. In addition, if you stop payment to the second lender, other than continuing to payment the first on the due date, the second mortgage owner would have to skip through some extra bands to try to recoup their losses, while the first one has no propensity to alter a thing.
The best thing you could do would be to speak to an inexperienced mortgage agent or creditor (or lenders) in your area about second rate lending for you. On my territory (New England) the most generous/friendliest "second mortgage lenders" are the locals - wholesalers, correspondence agents or joint stock houses and cooperative societies. So if a creditor is based in or near your neighbourhood and is very comfortable with the area, he may be more willing to be in a more risky "second" location - offering you a second mortgage.
They can also be effective if you talk to your present second mortgage provider - in fact they are already in the high-risk second place, so they can be ready to provide you with a more secure mortgage that will secure both your place and yours in the future.