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Can I consolidate 2 mortgages into 1?

5 years ago my husband and I bought a house valued at $255k. It was our first house and had no down payment so it was split into a 70/30 loan. The amounts owed on our first and second mortgages are roughly $180k and $61k, respectively. The first mortgage is at an interest rate of 6.0% and the second at 8.5%. The issue is that in our town home prices have fallen significantly and our house is valued at $170k. That puts up upside down almost 150%. We have great credit scores and great incomes. We would like to take advantage of a lower interest rate, not just on the first mortgage but both. We don't have anything to put and we have never been late on a payment. Are any options for us? by sarahf_588_585 from Ridgecrest, California. Jan 12th 2012 Reply


Hans Bruhner (Hans Bruhner)
#105 ranked lender in California - 102 contributions

That is a hard situation. If the first mortgage is a Fannie Mae or Freddie Mac loan you should be able to refinance the first as long as the second mortgage agrees to subordinate to the new first mortgage. If they say no it is all over.There is no lender who would be willing to take on new debt higher than the value of the home.

Jan 12th 2012
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Gregorio Denny (GVDenny)
#231 ranked lender in California - 380 contributions

You should at least attempt to refinance the first. If you plan on keeping the property that would free up funds to accelerate payments on the 2nd and get rid of it and that high rate. There really are no programs to combine the 2 if you don't have the equity. Please contact me and I can show you how refinancing the first can help you shorten the remaining term on your second. http://WeFixRates.Com

Jan 12th 2012
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Cindy MacDonell (Cindy Wright)
#121 ranked lender in California - 21 contributions

As the two responses below stated, if your first is owned by Freddie Mac or Fannie Mae, you would be able to refinance your first, and subordinate the second. With your first at 6.00%, it would be wise to look at refinacing this into a lower interest rate. Rates now are in the mid 4's for the Home Affordable Refinance Program (HARP). If I can be of any assistance to you please do not hesitate to contact me and I can give you the information you need to make an informed discission. Cindy MacDonell loansbycindy@gmail.com

Jan 12th 2012
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,815 contributions

Unfortunately, you are not going to find a lender willing to refinance a second mortgage on a property that does not have sufficient equity to secure their loan amount. Even when the enhanced HARP is rolled out, it is doubtful there will be a solution for what you want to do. Your best option is likely to be refinancing the first and using the payment savings as additional principal reduction on the second to pay it down faster. My advice is to contact a local Mortgage Banker/Broker, rather than one of the big banks. Unlike a bank employee, who is most likely just an order taker, a Mortgage Broker/Banker is Trained, Tested and Licensed in all aspects of Mortgage Origination. He/She will have access to loan products of many lenders, not just those of one bank, and can properly guide you. But more importantly, He/She is trained to take a look at the various different options available to you and guide you into the one that makes the best sense for your situation. Don't forget to check out your selected Mortgage Originator at the National Mortgage Licensing System at www.NMLSConsumerAccess.org ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Jan 12th 2012
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Michael Chandler (mchandler15)
#535 ranked lender in California - 7 contributions

Hello Ridgecrest,Yes, I would suggest the same. Refinance you first loan if your second is willing to subordinate. However, a recent development has come up with the HARP (Home Affordable Refinance Program) specifically targeting home owners in your exact situation. The extended/new guidelines have just recently been updated on 12/20/2011. If the investor on your loan is Fannie Mae, this may be a good route for you. Here is a link for more information. http:// www.efanniemae.com/sf/mha/mharefi/pdf/refinancefaqs.pdf. Hopefully this helps. mchandler@mylenderdirect.com

Jan 12th 2012
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Adam Webb (Adam.Webb)
#15 ranked lender in South Carolina - 19 contributions

Maybe, you might not be able to combine your first and second mortgages at this time since you are upside down. However, it may be worth while for you to refinance your first mortgage using the Home Affordable Refinance program. This would allow you to cut your first mortgage interest rate significantly thus saving you some hard earned money. I hope you find this information helpful. Please contact me with any questions or concerns. I look forward to speaking with you shortly. Adam Webb, NMLS # 196458, Mortgage Consultant, First Charleston Mortgage, 1 (800) 968-3987 or adam.webb@firstcharleston.com

Jan 13th 2012
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