Refinance Mortgage Loan

Question: Refinance mortgage loan?

(Posted by: BlueDevil Master on 2006-09-29 09:13:42)

I have 2 loans for my condo because i don't want to pay PMI. My 1st loan is 80 % (fixed) and the 2nd loan is 10 % (adjusted). My condo value went up roughly 12 %. Can I refinance my 2nd loan for a fixed rate, even though I haven't paid off 20 % of the loan?

Posted by: michael m on 2006-09-29, 09:37:06

Yes you can all you have to do is contact your mortgage broker/ bank and do an increase and blend on the mortgage that is at 80%.there might be a penalty on the smaller amount to discharge it but the lower rate on the first mortgage should offset that and now you will have one payment that will be lower tha the other 2 combined or even lower if you increase the amortization.

Posted by: cute chick on 2006-09-29, 09:15:58

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Posted by: TheTruthAboutMortgage.com on 2006-09-29, 09:42:18

You can refinance both loans, or just refinance the 2nd loan. But if your condo's value went up 12%, you could probably eliminate the 2nd loan, and roll it all up into one loan at 80% loan-to-value. Let's look at an example. Say your condo was purchased for $400,000, and has since then gone up 12%. The new value is $448,000. You have a 1st mortgage of $320,000 and a 2nd mortgage of $40,000. Because your new value is $448,000, you can refinance both loans and open a new single 80% loan-to-value loan at $358,400. Of course your existing liens are $360,000, so you would have to come in with some cash for the difference and money for closing costs, but you could settle into a single fixed loan and eliminate your 2nd this way. Possibly you'd be able to get a bit more value out of your property beyond 12%, and then you could refinance the loans into a single loan without bringing money in. Alternatively, you could refinance just the 2nd mortgage based on the new value. But it would probably be wiser to stick with a single loan at a lower fixed rate. It also depends if you plan on staying in the property for an extended period of time. And how much money you have on hand. Also note that if you have an equity line 2nd mortgage, it likely won't go up as the fed has paused the prime rate, and many industry experts feel the next move will be to lower prime. Of course if the rate on your 2nd mortgage is quite high, you should refinance out of it.

Posted by: Matt J on 2006-09-29, 11:12:58

Yes, you can get a 2nd fixed rate and maybe a lower one on your first. Matt diversifiedlender.com/ minnesota-mortgage-rates.net/

Posted by: W. E on 2006-09-29, 13:32:39

Yes - you can go with a 1 loan at 90 percent or 95 percent - depending on the appraised value - Just remember you will have closing costs associated with your loan again (ok). Also check and see if you have a pre-payment pentality associated with your loan, and if so how much that may be? Look at your mortage note, and any riders associated with your mortgage (you got them at the closing table).

Posted by: stevelarsondirect on 2006-09-29, 18:13:01

While you are not yet at 80% loan to value to combine both of your loans, you can still replace your existing equity line to a fixed rate 2nd. Your existing equity line may have an early closure fee, but since the rate is high, it may still be beneficial depending upon the loan balance. If you would like to research this further, please feel free to contact me at slarson.com/ contact or steve@slarson.com Regards, Steve