Refi 2nd MortgageMortgage Refi 2.
What makes you think a 2nd mortgage should be refinanced? A number of different criteria need to be taken into account when determining whether a second mortgage should be refinanced. A lot of people want to re-finance a 2nd mortgage because the 2nd mortgage interest tends to be higher than the first one. There is a common practice that creditors give higher 2nd mortgage interest because they work under the presumption that if a borrower experiences pecuniary difficulty, they will first use their money for their first mortgage.
Is it possible to re-finance a second mortgage?
Funding a second mortgage is usually more challenging than funding a normal mortgage. A second mortgage is a mortgage that is not a mortgage that is not a mortgage. This is mainly because a second mortgage bears more exposure for the borrower - if for some reason the home is bought or excluded, the second mortgage only gets what is remaining after the disbursement of the first mortgage.
Consequently, the second mortgage lender franchise is smaller than the first mortgage lender franchise and provides fewer optionals. However, if your loan is good, your incomes are steady, and your disbursements were consistently, you should be able to find refinancing for a second mortgage. Like any mortgage, make sure you look around to see the interest rate comparison.
It is also a good idea to speak to your present creditor, who may be able to provide you with funding. It allows you to avoid certain acquisition charges and certain acquisition expenses that are associated with funding. You may not get the best interest rates from your present creditor, so make sure you are comparing your choices!
When the interest on your first mortgage is also significantly higher than the actual interest on your mortgage, it might be in your interest to convert your first and second mortgage into a flat fee. Also, if you own a substantial part of the capital in your home, you may consider using a low interest line of credit called HELOC to repay the second mortgage instead of re-financing.