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What are my refinance options?

My current 1st mortgage is approximately $234k and my 2nd is approximately $48k. My estimate value of home is around $250k. I have 21 years left on these loans. My first is fixed at 6.5% and 2nd is adjustable and currently at 4%. I would like to combine both to refinance for a 15 year loan. Since there is no equity I have had trouble trying to lower payments and/or years. Do I have any options or do I have to wait it out until equity is built? by HDRamfamily from Hesperia, California. May 1st 2015 Reply


Derick Condron (rightstartoregon)
#33 ranked lender in Oregon - 597 contributions

You are more than likely going to have to wait to combine the two if you do not want to pay mortgage insurance. You could look at subordinating the second and just doing a refinance on the first to lower terms to 15 year and take advantage of the rate market we are currently in.

May 1st 2015
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Kevin W. Hardin (kevin@kevinhardin.com)
#144 ranked lender in Arizona - 9 contributions

I agree with Derick as far as a mortgage origination solution. However, it is possible that your Combined Loan To Value CLTV i.e. the combined amount of 1st and 2nd as a percentage of the property value may be too high to even refinance the 1st, but should be explored first.Loan modification is a route that many of tried. I strongly caution you against it. If there is a real issue with it, is the likelihood that the lender will encourage you to go late on your payments to get approved. You might get a lower rate, you might get a much lower payment, but credit impact is very tough to deal with and affects every other facet of your credit life.

May 1st 2015
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Barb Lanis (BarbLanis)
#72 ranked lender in Illinois - 662 contributions

If your current 1st mortgage was closed before June 1, 2009 and backed by Fannie or Freddie, then you may be able to refinance the first mortgage under a HARP refinance. You can't touch the 2nd on a HARP refinance, but you can drop your rate significantly and also go with a 15 year. That should free up enough cash flow to start paying down the 2nd. Check these two websites to see if you are backed by Fannie or Freddie: https://knowyouroptions.com/loanlookup -and- https://ww3.freddiemac.com/loanlookup/

May 1st 2015
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