Mortgage Refinancing when You Have Two Loans

Having two loans does not necessarily mean mortgage refinancing has two be difficult. There are actually several options to choose from when refinancing two mortgages.

Borrowers have the option of consolidating the loans into one loan, subordinating the second or refinancing both loans. Most borrowers opt for consolidating the two loans into one because once the loan closes the borrower will only have one payment instead of the initial two. Consumers who are happy with their second mortgage because of the rate or the services of that particular lender  may choose to remain with their current lender. In instances such as these the new lender may asked that the second lien holder agree to remain in second position on the title. If the lender agrees a subordination agreement must be completed and signed by the second lien holder. The final option is refinancing both loans with two new loans. In all cases the borrower must still be able to prove not only that their is enough equity in the property to refinance the loans but that they can still safely afford their new payments and all their other debts once the loan has been refinanced. The new loan or loans must be a benefit to the consumer either by lowering the rate and term making the payments smaller or using some of the equity in the property for a specific reason.