One of my mortgage loans is 20k at a rate of 9%. What steps do I nick to best refinance the smaller loan?
Answers:
I would run along with the idea of combining the 1st and 2nd as long as their are no prepayment penalty, you could improve the rate on your 1st mortgage and you wouldn't be adding PMI to the equation.
Depending on the loan to convenience, you may not be able to find a fixed rate on a stand alone 2nd that is much better than what you enjoy and you might just opt to make extramural payments to principal to pay it off faster. Only do that if you don't own any higher interest non-mortgage debt.
No broker is going to be interested in refinancing your 2nd as they can't receive any money on a 20K loan, but your local bank might be eager for the business and prime is down so HELOCS are support in fashion.
9% is not the run out of the world on a 2nd mortgage especially if the combined loan to value is in excess of 90%. If it is on a currently on 30/15 balloon, paying and extramural $40/month will pay it off surrounded by 15 years. Source(s): 7 years lending experience. BS in nouns.
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Talk to your mortgage broker.
Unfortunately at hand may not be much you can do about the rate on your 2nd loan. I had one approaching that on my first place. The 2nd loan is much riskier because in a foreclosure situation the 2nd loan company will most likely lose adjectives their money. They are in line at the back the first bank.
In my case I wait a few years until I could afford to refinance and make the 20% down. I had to wage prepayment penalties of almost $3,000, which sucked.
There's not much you can do about the situation when you're youthful and don't have cash. But be happy--- you own a home! As long as you can afford the payments, you're okay.
Still, doesn't hurt to check near your mortgage broker to see if he has any ideas.
Your first call should be to your mortgage broker and see if you might be able to consolidate your first and second mortgage into a larger primary mortgage (first mortgages other have a better rate), but be careful of prepayment penalty on either loan. Likely your mortgage broker will help you determine whether refinancing any or both loans is surrounded by your best interest and how to go about it. Once you catch this information shop the deal with a different mortgage broker!
if you have two loans with one loan have a lower interest rate than the other, you can combine them and get a lower rate. you first have to communicate to your lenders on how to go about this. near are also other ways to get the best out of a refinance. check here for more ideas: http://www.whataboutloans.com/mortgage/m…
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