Can I Refinance To Get My First And Second Mortgages Combined?

Can I refinance to get my first and second mortgages combined? Find out here if you can refinance into one consolidated mortgage!!

With interest rates near an all time low, many people are looking to take advantage of the low rates and refinance their mortgage. Many people who have both a first and second mortgage run into confusion as to whether they can combine their first and second mortgage into one simple mortgage. This article describes considerations to be taken when figuring out if a first and second mortgage can be combined when refinancing.

Are Mortgages with Same Lender

The first consideration taken when trying to refinance into a first and second mortgage into a combined mortgage is whether the two mortgages are with the same lender. If the first and second mortgages are with the same lender, refinancing into one simple mortgage to pay off the existing two mortgages is simple. If the mortgages are with two different lenders, it can be more complicated as different lenders have different pay off procedures.

Loan to Value

The second consideration as to whether the first and second mortgage can be combined during a mortgage refinance is whether the loan to value is below a certain point. Most lenders require a loan to value below 90% in order to refinance. If the borrower’s two mortgages combined bring the LTV above 90%, they may not be able to refinance and pay off both mortgages.

Pre-Payment Penalty

Another reason why the first and second mortgage may not be combined during a refinance is if the second mortgage has a pre-payment penalty. During the sub-prime loan era, many lenders offered second mortgages with high interest rates. To sway borrowers from paying off the high interest loan, many lenders included pre-payment penalties. If a pre-payment penalty exists, then combining the loans may not be possible.

Can I Refinance To Get My First And Second Mortgages Combined?

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