Can I refi my 1st mortgage and leave my 2nd mortgage?

Jan

Can I refi my 1st mortgage and leave my 2nd mortgage?

Archived in the category: 1st mortgages

I’m trying to look at all options here…my 1st mortgage is at 160K and my 2nd is at 40K. With the market, currently it is worth around $190, so I can’t refi them into one fixed loan. They are going to adjust in January 2010 and I’m trying to get this sorted out before the rates go up. Is it possible for me to refi the 160K loan to a fixed rate and leave the 40K loan where it is?

The rates may go up or they may go down…there is no guarantee and no one knows what they are going to do.

If you knew the rates were going up would you have signed up for an ARM? Of course you wouldn’t b/c you thought they were going to stay the same or go down…well, they didn’t.

The problem is, you’ll have to bring $10K to closing in order to refinance your first mortgage b/c you appear to be upside down in value.

Like Matt said, normally all you do is get the second lienholder to subordinate, but they won’t do that if it leaves you in an overall negative equity situation.

Posted by: admin - 7 Comments

7 comments for “Can I refi my 1st mortgage and leave my 2nd mortgage?”

suburban

No wonder this world is in a mess
References :

January 31st, 2010 at 8:37 am

goz1111

Nope, because when you seek to refinance the first note with a second note attached; this equates to the second note becoming senior and the first note since its refinance becomes junior to the second, so no way the first will agree to the deal
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January 31st, 2010 at 8:49 am

gruntfoce

Yes but your second mortgage will have to subordinate. They will want to know the new terms of your first mortgage. If they refuse you can not refinance. As long as refinancing puts you in a better position with out added risk to the second mortgage they will most likely approve the subordination.
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January 31st, 2010 at 9:10 am

golferwhoworks

you may be able to just that if you pay the 2nd down by $10000 and then ask them to subordinate to a new first deed of trust. That is the only way and then they can still refuse. If not then now way as you will be over your equity and there is no market for that any where I know of.
I am a mortgage banker in Tn & KY
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January 31st, 2010 at 9:34 am

Matt Jutras

The short answer is no.

You are "upside down" on equity, which means you owe more money on the house than it is actually worth. I’m 99.9% certain the bank will not allow you to refinance.

Under normal circumstances, you would call the first mortgage holder and ask them if they can do what is called a "subordination of the second loan" so that you can refinance the first.

Give it a shot and see what they say, but it looks grim. Sorry.
References :
http://www.mortgagefit.com/second-mortgage.html

January 31st, 2010 at 9:41 am

Hector L

Is all of this worth all the closing costs? Why not concentrate on sending extra every month to knock out the 40K. That probably has the higher interest rate. In 2010 you can have better leverage with only one mortgage.
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January 31st, 2010 at 10:07 am

Expert Realtor

The rates may go up or they may go down…there is no guarantee and no one knows what they are going to do.

If you knew the rates were going up would you have signed up for an ARM? Of course you wouldn’t b/c you thought they were going to stay the same or go down…well, they didn’t.

The problem is, you’ll have to bring $10K to closing in order to refinance your first mortgage b/c you appear to be upside down in value.

Like Matt said, normally all you do is get the second lienholder to subordinate, but they won’t do that if it leaves you in an overall negative equity situation.

References :

January 31st, 2010 at 10:49 am

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