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Second Mortgage Refinancing

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Just a few years ago second mortgage loans were relatively easy to qualify for and many homeowners utilized them for debt consolidation and to receive cash out.  Borrowers with good credit could qualify for a low rate second mortgage or an interest only home equity line of credit with no equity required.  Some borrowers actually qualified for a 125% second mortgage that enabled consumers to borrow more than their homes were worth.  Homeowners liked these 125 equity loans for consolidating debt and financing home improvements.  Borrowers also used second mortgages as purchase money in an effort to avoid private mortgage insurance when buying a home.

Today second mortgages are hard to find.  First mortgage refinancing is back in style again. Very few traditional lenders are offering home equity loans or credit lines because of the credit crunch and the high default rate of second mortgage liens over the last four years.  It is unfortunate because thousands of borrowers are looking for second mortgage refinancing, because they got stuck with an adjustable rate HELOC.  Refinancing these 2nd mortgages into a fixed interest rate makes sense financially.  If you have a little bit of equity we recommend refinancing your 1st and 2nd mortgage together with a FHA mortgage. The government loans enable borrowers to get cash out with refinance loans at 85 to 95% loan to value.

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