Articles Comments

Debt Relief – Insolvency – Bankruptcy Information » Mortgage Refinancing » Why do people take out a second mortgage instead of refinancing?

Why do people take out a second mortgage instead of refinancing?

Not more to add for this question. Just curious.

RELATED POSTS:

  1. What are the differences between going to different lenders for a Mortgage refinancing? I am working with my original lender to refinance my house, but I’m curious as to what advantages I have...

  2. Is it possible to change mortgage companies without refinancing? Our mortgage was sold to a really crappy company. We have thought of refinancing, but then we realized we have...

  3. Mortgage Refinancing Questions & Answers Freedmont Mortgage CEO Carl Delmont answers questions about mortgages, including a question about refinancing at a time when banks...

  4. Question about refinancing a mortgage and the tax implications? My future son-in-law is trying to refinance his home mortgage. The man handling the refinance suggested that he might get...

  5. I am refinancing my mortgage, can I start to sell the house now? I am refinancing a ballon to a fixed rate mortgage and in the agreement it says that I have to...

Written by

Filed under: Mortgage Refinancing · Tags: , , , , ,

5 Responses to "Why do people take out a second mortgage instead of refinancing?"

  1. mJc says:
    Usually because the rates for refinancing are higher than their current mortgage interest rate level. It’s never a good idea to get a second mortgage out on your house…
  2. Brieanne says:
    It doesn’t make sense to refinance unless the interest rate is lower on the existing mortgage.
  3. mfratant says:
    Typically there are little or no closing costs on a second mortgage and you still get a low rate.
  4. Rapture says:
    Refinancing incurs closing costs, which can run into the thousands
  5. SmartA$$ says:
    Tons of possible reasons such as:

    1. lower closing costs
    2. ability borrow some money without resetting the existing mortgage to current market rates which might be higher than the fixed rate that the homeowner has locked in.
    3. shorter term on the 2nd mortgage so less interest in the long run instead of rolling that balance into a long mortgage of 20 or 30 years
    4. Faster loan processing
    5. 2nd mortgage avoids private mortgage insurance on first mortgage if the total equity is less than 20% of the value
    6. When you pay off a 2nd mortgage you eliminate that monthly payment but if you roll the new debt into the existing mortgage the higher payment is fixed for the life of the loan even if you pay extra and pay down the balance by the original amount.

Leave a Reply

Connect with Facebook

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Not finding what you're looking for?
Do a custom search of our entire site:

Get Adobe Flash player