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Debt Relief – Insolvency – Bankruptcy Information » Mortgage Refinancing » Can I refinance my mortgage without having to payoff my home equity line of credit balance?

Can I refinance my mortgage without having to payoff my home equity line of credit balance?

I have a mortgage & home equity line of credit with the same lender. The rate on the equity loan is currently 2.5% (prime – 3/4). I was thinking of refinancing my mortgage and taking out a little cash to pay off some credit cards. My question is, if I refinance my mortgage do I have to pay off the balance on my home equity loan?

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6 Responses to "Can I refinance my mortgage without having to payoff my home equity line of credit balance?"

  1. acermill says:
    Yes, you will need to pay it off. You won’t get a refinance with an existing lien against your house.
  2. Professional Peon says:
    No you don’t have to pay off the second, you just have to ask them to do a subordination. Whether or not they will in the current economy is another story, but yes it can be done.
  3. MiltonT says:
    As Professional Peon says it’s legal but difficult. Did your bank say they wouldn’t do it? If you have enough equity you could refinance and get another HELOC from another bank.

    Call a few lenders and ask.

  4. Steve says:
    no you will not have to pay it off.but and it is a big but! banks have been trying very hard to tighten up their exposures to risks, and having a equity
    line of credit now days is considered a risk.so the holder of second loan
    (equity line) may not agree for subordination,even though they are the
    same bank. they may also not allow you to take cash out. unless there is
    substantial equity exist.your best chance is going to be refinancing with
    the same lender,and before spending any money,you need to make certain
    that the line of credit holder is willing to subordinate.
  5. Doughboy says:
    Yes, you can. I just did this with my Wells Fargo mortgage. It was my choice when I refinanced my mortgage whether I wanted to roll in my home equity line or keep it open. I had a decent rate (but not as great as yours–wow!) and I chose to keep it open. The bank made no big deal out of it one way or the other, and although I have pretty good credit, I had a very large balance on it, more than $350k.
  6. I do consider all of the ideas you’ve presented for your post. They are really convincing and can definitely work. Still, the posts are too short for starters. May just you please lengthen them a little from subsequent time? Thanks for the post.

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