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Can I only refinance my first mortgage and not my second mortgage?

I was curious is it possible if I have two separate mortgages with two different companies would it be possible to refinance one without affecting the other? by jamesb_127_275 from Austin, Texas. Nov 4th 2011 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

You can refinance the first, however the 2nd will have to subordinate. WilliamAcres.com

Nov 4th 2011
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

Yes it is possible. If you are looking to refinance the second, that is easy, simply arrange for the new 2nd lender to payoff the current 2nd. If you are looking to refinance the First, it gets a little more tricky, and you can't do it without getting the 2nd lender involved. Here's why; When each mortgage is made, the lender records a security document (or lien) against the property with the County Recorder's Office. Each lien gets its priority based on it's position. The 2nd mortgage gets its name form the fact that it's lien is 2nd in line behind the 1st. When you refinance only the first mortgage, and the documents are recorded, the new lien gets recorded in 3rd position, behind the existing 1st & 2nd and the old 1st goes away. Now the second is first and the new first is second. The new lender won't allow this, so the new mortgage company will require the existing 2nd lender to subordinate their position to the new mortgage. This means that if your existing second lender will not approve, and many won't, you can't. Work with a local Mortage Banker or Mortgage Broker, not one of the big banks. MBs know how to do this and can create the compelling case that will encourage the second lender to agree.

Nov 4th 2011
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William Crawford (AspireLending)
#72 ranked lender in Texas - 6 contributions

I want to tread lightly here, as I need to respectfully take issue with some of the well meaning advice you have been given by my industry colleagues.First, to answer your question directly it is absolutely possible for you to refinance the first mortgage without refinancing the second lien. Some of the answers that have been posted here eluded to the fact that your second lien will have to remain in second lien position in order for a new lender agreeing to do a refinance as they will require that they be in 1st lien position. This is very accurate, and the process for this occurring is referred to in they industry as subordination, or in other words, the second lien remaining subordinate to the first lien position. I think all of the advice you have receive thus far concurs with this one point.However in Texas, so long as the new loan that you are obtaining is not a "cash-out" or equity loan (in other words your new refinanced loan is doing nothing more than paying off the existing loan payoff and closing costs), then there is no need for a "subordination agreement" from your current second lien holder. Texas title law allows title companies to insure that the your current second lien will remain in second lien position so long as the lender performing the new refinance prepares what is known as a "renewal and extension" rider to your new mortgage, which is simply recording a statement of public record that the newly refinanced mortgage is simply a continuation of the existing debt that your current second lien is already subordinate to. With that recorded statement, and the proper language in the title commitment that will be used to facilitate your refinance (at no extra cost I might ad), then the second lien remains in second position with no action required on behalf of that lien holder.Again, I want to be respectful to my colleagues here. This is not a well known fact and it is very unique to Texas refinances. If you feel I may be of further service to you in assisting you with your stated objective, please feel free to call me directly at 817-203-2200.Best,- -William Crawford

Nov 5th 2011
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In the State of Texas just like the original article says you do not have to subordinate your second loan as long as you record the Renewal and Extension Rider becuase that is renewing your original loan therefore it is already in first lien position

Jul 17th 2013
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