Can I refinance my second mortgage only, without consolidating it with the first?
I need options related to my second mortgage. It's a balloon, but the problem is the current payments. GMAC informed me I did not qualify for a refi due to change in regulations. The income used to aquire the 2nd can not be used to refi. I am disabled and due to increased medical expenses, I can't make the 700 mth. payments. I am current but not sure I can make April payment. GMAC (2nd mtg.) told me my only option would be sell or foreclose. My 1st mtg. is joint with my daughter and current with a fixed 30 yr. 6.25%. Payments are fine. I would rather not consolidate with 1st. The debt would then show on my daughters credit.
As the subprime fallout continues, many lenders are tightening their rules for second mortgages and equity lines of credit. Even then, I see no reason as to why you should not be able to refinance your second mortgage. If your current lender does not agree, you should be able to find other lenders who are willing to offer you good terms and a good rate.
The first step is to speak to multiple lenders. Bills.com makes it easy, just enter your information in this form— Mortgage Refinance Quote — and you will be contacted by qualified lenders interested in your business. When you talk to perspective lenders, be sure to ask about a home equity line of credit (HELOC). You can use the HELOC to pay off your second mortgage, considering the interest rate is lower (so that your payments will be lower). After you speak with different lenders, you will also get a better picture of your chances of successfully refinancing only your second mortgage.
My other suggestion is to try to speak to your first mortgage provider for a solution. You will need to be aggressive on your part and contact whosoever concerned, multiple times, until somebody takes the time to listen to you. See what solutions they will have to offer (if any at all). If you find out that, even after you speak to multiple lenders and there is no solution then you will have no choice but to club your first mortgage with the second into one single loan. You might get a better deal this way.
Foreclosure
Lenders and servicers do not like to foreclose on mortgages. Foreclosures cost more than can be made back, so lenders foreclose only as a way of limiting losses on a defaulted loan. If homeowners get behind on payments, lenders will most likely work with them to bring the loan current. In order to do so, however, the owner must stay in communication with the lender and be honest about the financial situation. The lender's willingness to help with current problems will depend heavily on past payment records. If the owner has made consistently timely payments and had no serious defaults, the lender will be more receptive than if the person has a record of unexplained late payments. For those falling behind in payments, or who know that they are likely to do so in the immediate future, they should contact the lender right away about meeting to discuss alternative payment arrangements.
For more information on second mortgages, please visit our second mortgage information page.
I hope the information provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog
You basically have two options: 1. Refinance the whole loan. 2. Speak to the credit union and try to modify your current second mortgage
Refinancing both mortgages means paying upfront fees on the whole amount you owe. However, today's rates are low and you might find a deal that makes it worth your while. If your payments are too high then you can look into taking a 30-year FRM. I recommend that you get a mortgage quote. Make sure to look at the whole package, including interest rate, mortgage insurance and fees.
Your second mortgage is for a small amount of money compared to your first, so the fact that the higher interest rate is of marginal importance. But, if you are having trouble making your payments, then speak to your credit union about modifying the loan. However, in general, lenders don't like to change mortgage loans. If you can afford the payments, but don't like the high interest rate, then I recommend that you look at all your debt and make extra payments, if possible, to your debt with the highest interest rates. That might be your second mortgage or it might be credit cards.