Consolidating second mortgages
The following are some important considerations when evaluating loan options involving a subordination: Even with the above considerations, a subordination could be a very beneficial loan option.
When you apply to refinance your home with the intent of financing more money The reason consumers should pay attention to this is because when you do a cash-out refinance, the loan costs more.
Many lenders will combine a first and second mortgage into one as a rate and term refinance even if the second mortgage was taken out after the original loan was made (for home improvements, etc.) as long as the second mortgage has in the past 12 months. You might find a lender, a bank and a credit union to be far different from each other in terms of what can or cannot be done.
If you fit that requirement, the needed equity position drops to 20%. No draws in the past 12 months on your second mortgage could make all the financial difference for you. If you’re looking to save money, you owe it to yourself to check on this continually, especially if you’ve been turned down in the past. You might just find you actually can get your loan done after all.
If consolidating mortgages is either not practical or simply impossible, there may still be some good loan options for you.
It’s no secret that lending guidelines are far tighter today than they used to be, so depending on what kind of second mortgage you have, when you took it out, and the total combined amount you owe on your mortgages, it may not be as easy to consolidate today into one loan as it was in past years.
[hcshort id=”7″] The following are some common scenarios where consolidating multiple mortgages is either impossible or provides little benefit: If your plan was to consolidate your mortgages but there’s no benefit in it or it’s impossible to do because of lending guidelines, ask your lender about redoing just your first mortgage and leaving your second mortgage intact in a subordination transaction.