subject: Second Mortgage Refinance Tips [print this page] The decision to refinance a second mortgage should never be taken lightly. Yes, obviously it's another way of acquiring extra cash but it also implies acquiring a new loan. You need to make certain that your second mortgage would not just come with surplus cash but better loan rates and terms as well.
Why You Should Refinance with a Second Mortgage
Not every situation would warrant refinancing and not all financial need may be solved with a second mortgage. You need to consider every factor and cost involved in the act before making your decision. Listed below are some good reasons that would merit refinancing with a second mortgage.
No More Private Mortgage Insurance
Private mortgage insurance may have been levied on your first or existing mortgage but if you refinance with a second mortgage, you can avoid paying for PMI. Unknown to many, private mortgage insurance is quite an expensive expense. You might not notice it because it could already be as part of your payments, but PMI can cost you thousands of dollars every year. That's money wasted and not well-spent!
Consolidate All Mortgages in One Loan
By refinancing with a second mortgage, you can consolidate your existing mortgage and perhaps even other debts into one simple loan. Of course, this would only be advantageous if your second mortgage comes with better rates and terms. Shop wisely!
Better Rates and Terms
Had times been especially tough when you acquired your first mortgage? That maybe the excuse why your present monthly interest is unusually high? But today's market is different and there could be low interest rate mortgages you can now make the most of. With low interest rates, you'll be in a position to ensure lower payments as well.
How about the terms of your current mortgage? Are you happy about it? If not, you can refinance using a second mortgage with terms that match your current financial needs. If your first mortgage's attributable to expire this year but you haven't yet enough money for the balloon payment, you can refinance with a second mortgage to settle the last payment and rest easy with a longer loan term.
Cash Out, Cash Back
Last but not the least, refinancing with a second mortgage will present you with extra cash. The sum of surplus cash available will obviously rely upon how much you'll borrow and the number you have to pay to settle your existing mortgage.
But that is not the end of it. If, for instance, you decide to sell your house, you can utilize part of the proceeds to settle your second mortgage. If you were lucky to get the best refinance mortgage rates then you'll likely have extra cash once more after closing your loan.
How to Refinance with a Second Mortgage
If you are convinced about the rightness of refinancing then here's what you should do to refinance with a second mortgage.
Step 1 Improve or repair credit score.
It's the only way to make you eligible for the best mortgage refinance rates. You can do this alone or you can avail of the assistance of a credit repair company.
Step 2 Browse for rates.
Know which companies offer the lowest rates and what their requirements are in return. Know the amount paid involved and which one might be waived in your favor.
Step 3 Apply.
Make sure you'll look through the terms and conditions of your second mortgage before subscribing for anything!
