When Refinancing a Second Mortgage Makes Sense

Homeowners like our 2nd mortgage refinance loans because the interest is low and the rates are fixed. Years ago, many borrowers took out to loans to purchase their homes and our lenders provide a great opportunity for refinancing 2nd mortgage loans into a new program with a reduced interest rate for 15 or 30-years, we provide fixed rate loans and lower payments with debt consolidation and subordination options for FHA, conventional and non-conforming loans.

Refinancing second mortgage loans and combining the debt into one mortgage with a fixed interest rate and lower monthly payments that ensures financial protection against inflation when the Federal Reserve starts cutting rates in 2024 and 2025.

In the mortgage industry, nothing is more popular than refinancing your first and second mortgage together. It may be a wise move to refinance your existing second mortgage with your first loan into a fixed rate mortgage that save you money by combining your first and 2nd mortgage together. You can also take out a new second-mortgage loan and lock into a fixed rate loan with fixed terms and fixed payments for the life of the loan. Ask your loan officer about your eligibility for the no cost mortgage refinance program.

Refinancing a second mortgage may entail stricter requirements due to increased risk assumed by the lender in case of default. Getting approved for refinancing a 2nd mortgage typically requires excellent credit and a commendable history of on-time payments. Moreover, exploring the possibility of refinancing both the first and second mortgages concurrently is viable.

Tips for Refinancing a 2nd Mortgage or HELOC

refinancing 2nd mortgageBD Nationwide Mortgage has nearly twenty-two years of experience in the arena of Refinancing Second Mortgage Programs.

Whether you want to refinance your fixed rate equity loan, or variable rate HELOC line, BD Nationwide can help you find the broker that best meets your needs.

We are dedicated to making sure that your lending experience is as streamlined and stress-free as possible.

Therefore, we always strive to pair you to lenders and bankers that have solid years of experience in the arena of refinancing variable rate 2nd mortgages into fixed rate equity loans as well as combining 1st and 2nd loans together for one reduced payment.

Find out why we year in and year out we continue to connect consumers to trust-worthy finance companies that offer competitive pricing and excellent service.

  • Equity Credit Line Fed Tips
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  • Refinance 2nd mortgages

5 Reasons for Refinancing Adjustable Rate Second Mortgages and Revolving Lines of Credit

  1. Today’s second mortgage rates may be lower than credit line rates at this time.
  2. Consolidating Adjustable rate loans can lower your payments and save you money.
  3. Reduced mortgage payments will increase your cash flow.
  4. Fixed rate terms are better for planning your budget because the monthly payment is already determined.
  5. You can be out of debt quicker because the amortization schedule is calculated with simple interest.

What is Second Mortgage Refinance?

The finance definition of a ‘second mortgage refinance’ is when a borrower refinances an existing home mortgage that is in 2nd position on title with a replacement second mortgage. Refinancing second mortgages offer borrowers a lump sum of funds that is placed against the equity your home’s appraised value.
  • Cash is taken by the borrower at time of closing escrow
  • Second Mortgages are Tax-Deductible to 100% of property value.
  • No annual fees are charged with fixed interest 2nd mortgages.
  • Fannie Mae and Freddie Mac allow subordinate financing of 2nd mortgage liens when refinancing under the HARP 2.0 program.
  • Monthly payments are fixed and terms are set with simple interest amortization
Getting organized for refinancing a second mortgage is exciting because it can potentially provide lower monthly payments. It’s worth noting that refinancing a second mortgage or HELOC doesn’t mandate refinancing the existing mortgage simultaneously. Consulting a 2nd mortgage lending specialist is advisable to explore suitable options tailored to individual needs. BD Nationwide can help you shop and compare second mortgage lenders that meet your criteria and eligibility.

How long does it take to refinance a second mortgage loan?

In most cases, a 2nd mortgage or home equity credit line will take 3-4 weeks from start to finish. Certain factors can help speed up the loan process, and certain factors can slow it down. For example if someone already has a recent appraisal for their home, then often times it can reduce 3-5 days of the loan process. An example of something that could slow the process down would be, if someone was qualifying for a full documentation 2nd mortgage refinance, and they were unable to come up with W2’s or pay-stubs.
The loan process would be slowed down until the borrower was able to get copies of their income documentation. Bottom Line: The faster you get the documentation to your loan officer, the faster that underwriting can clear the loan conditions, so your loan can close.
Learn more about underwriting guidelines for Second Mortgages after the completing the Quick Quote Form above.

Why Are Hybrid Home Equity Loans Changing the Face of Second Mortgages?

According to Freddie Mac, “88% of homeowners who refinance their homes in the 1st quarter got a mortgage at least 5% larger than their first loan.” Since this was the largest increase since 1990, and the Fed continues to increase key interest rates, it is my contention that the demand for cash and the ability to finance quickly is the greatest it has been since World War II.
“The reality is that some people still believe the interest rates are below 6%,”said John Allen from Laguna Beach California. Allen continued, “If I need cash for home improvements. Why wouldn’t I just take out home equity loan since my first mortgage rate is under 5%.” John’s mentality mirrors many of my borrowers’ frames of mind of late. Consumers are much more educated than they used to be about financing and taking out second mortgages.
More Popular Second Mortgage Articles:
Linda’s Tip for refinancing a second mortgage – Ask Linda?
Ask your mortgage lender if they will subordinate if you wanted to refinance your 1st mortgage in the future. If they do then request to see a sample subordination agreement, and make sure that you maintain the criteria needed for a future refinance.
Fannie Mae and Freddie Mac revised their guidelines recently in an effort to help borrowers with underwater 1st and 2nd loans achieve a more affordable monthly payment. You cannot refinance a 1st and 2nd mortgage together under the HARP 3.0, but in most cases, you can get your second mortgage lender to subordinate the junior loan.
National Association of Realtors® “The Thirty Year mortgage with a fixed interest rate should continue to hover at record lows below 6% during 2023 and 2024.” For more information, please visit realtor.org
New Equity Loan Opportunities from 2nd Mortgage Lenders – A recent survey of mortgage companies revealed that lenders are beginning to open up new programs for equity loans.
Refinance with No Documentation – Many homeowners have been watching on the sidelines because so many lenders have withdrawn their stated income refinance programs.
Take advantage of our free articles on 2nd mortgage refinancing and home buying. Read our disclosures that have helped thousands of first time homebuyers. Speak with Loan Officer that understand 2nd Mortgages.
Disclosure: *The 2.75% rate quoted was for a $100,000 2nd mortgage on a fixed 15-year term. The monthly payment would be $678.62 a month. There is $495 in closing cost on this sample. The APR on this sample is 2.92%. 5-12-14 Ask for good faith estimate and all applicable rate disclosures from lenders when shopping for a refinance or 2nd mortgage.