Should I Refinance My First & Second Mortgages

Refinancing of both your first mortgage and second mortgage will lower your monthly mortgage payment and qualify you for overall lower rates. It will more than likely save you on your total costs and on closing costs and application fees. And while you are exploring new rates and different loan terms, you can reevaluate your loan’s payment schedule to better fit your budget needs.

Why combining your mortgages into One Mortgage product Is Better Than having Two mortgage loans.

Mortgage lenders prefer financing one total mortgage loan rather than having two separate loans. Because second mortgages are subordinate to first mortgages they are riskier to the lender and therefore have a higher rate. Typically purchasing a second mortgage interest rate is at least a full percentage point higher than you would receive with a  first mortgage rates.

Combining your first and second mortgage into one will qualify you for a lower rate and typically a lower payment than two separate mortgages.  In addition, since the lender charge fees when applying for a loan you will easily save money in application and lender fees by going through the process only once.  Closing fees are typically lower with a combined loan as well.

Would you also like to adjust your term to lower your payment?

It is pretty likely that your two mortgages have different terms. Prior to refinancing you should evaluate your rate and term and see if those terms and monthly payments meet your goals. A mortgage loan advisor like can help you find the right loan to achieve your refinancning goals. Prior to you refinancing is the perfect time to re-evaluate how your cash flow today is different than it may have been when you originally took the loans out. Be sure that the new loan that you are shopping for fits the lifestyle and payment goals that you are trying to achieve.

If you are looking for lower payment terms, then let us find  a longer term loan for you that has lower payments. While a longer term will more than likely raise your total interest costs, it will lower your montly payments and make any immediate budget concerns a thing of the past. If your financial or cash flow situation changes at any time, then you can make additional principal payments to offset the increased interest that you would pay if you pay over the extended term. Click here to have a loan professional call to discuss refinancing with you. Click HERE.

If your primary concern is your interest costs or the total cost of the loan over the term than it is best to look for a loan that has a shorter term with a lower rate. There are other loan products available that might be of interest. You can pay points to the lender at close that will further lower your loan rate.  This is used to lower your monthly interest cost. If you plan to live in your house for an extended period of time the the points should not be a problem and you will end up recouping the points over the term of the loan.

There are situations where a separate second loan is better.

There are some cases where having two separate mortgages might be better. One of tese cases is if your total mortgage principal is greater than 80% of your homes value. If this is the case you may get better rates by having a smaller second that has a higher rate versus a total loan with a higher rate. Another strategy is to ask your lender for a home equity line. There are typically no closing costs and the interest rates are typically very low. These are good if your home has equity built up.

The best approach to find the best rates available today is to contact and speak with an advisor. They will take a few details and plug it into their system which locates the best rates available today.

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