DECEMBER 12TH, 2018

Refinancing Second Mortgages

This documentation includes information consumers should be aware of when considering Refinancing Mortgages, including a Second Mortgage.

To refinance simply means balancing the cost-savings of a lower monthly payment versus the costs of completing the refinance. Refinancing a home mortgage must take full consideration to weigh-out the pros & cons. Should a consumer consider a refinance? The answer is simple because it all depends on each consumer’s particular situation. As a general rule, consumers could use this type of data to make a decision: if the difference in the interest rates will be two percentage points or more, it is likely worth it to refinance. Despite consideration of the fees a consumer may have to pay, two percentage points will save them money if they plan on staying in their home for a substantial period of time.

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Note: Before a consumer takes out a second mortgage, it is sensible to look at refinancing the entire loan amount. Where this would not make sense would be if the consumer has a substantial pre-payment penalty on their first mortgage loan or if the interest rate is quite low. Additionally, when a consumer is shopping for their refinance mortgage loan, they must be sure to add up all the costs involved before deciding on a lender. There are some additional costs such as title searches, filing fees, attorney fees, insurance and taxes that can add to the overall cost of the loan.

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General Overview for Refinances

A refinance mortgage is not an extension of an existing mortgage loan – it is a new mortgage loan with a new interest rate as well as payment plan. Some of the most common reasons consumers may decide to refinance is to lower their current interest rate, change their loan type, or even to pull some cash out of their house. Another great reason is that the consumer might desire to refinance to go from an adjustable-rate (ARM) to a fixed-rate.

Is it sensible to refinance again even if a consumer has already refinanced once before? The answer is an unequivocal yes IF the interest rates are falling at a steady pace, it may be well worth it to refinance a second, or even third time. Consumers may even be eligible for a tax-deduction on additional refinances.

About Refinances

In recent years, the refinance leaders have been offering “no cost” and “low cost” refinancing options which help to eliminate or minimize out-of-pocket costs. The best and likely the only avenue to guarantee a consumer is getting the best refinance rate is simply to compare lender rates as well as options.

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This site is not a broker and does not collect or solicit mortgage applications. Content is for informational or comparison purposes only. Services are not available in New York. Products and services may not be available in all other states.