Do My 1st And 2nd Mortgage Have To Be Through The Same Lender?

A 2nd mortgage is obtained by refinancing, the first loan is paid off and a new loan is created.

When a consumer wants to refinance their current loan they can use their current lender which may save on some fees and expenses, or they can choose to go with a different lender. In either situation it will be as if they are entering into the loan process for the first time, the same fees and obligations hold for a 2nd mortgage.

Things to Consider

When someone is considering a 2nd mortgage home loan it is best to have some idea of what it will entail. The new or current lender will look at the current income, assets, credit score, debts, and the value of the property. In some cases property rates decrease and the home may not be worth what it was at the start of the first loan and the consumer will not be able to get as large of a loan for the 2nd mortgage.

Cost

The cost of 2nd mortgage can be anywhere from 3-6% of the remaining principal of the original loan. There are prepayment penalties, application fees, loan origination fees, appraisal fees, inspection fees, closing fees , insurance fees etc. In some cases there are no-cost refinancing options, where the lender may cover the closing cost, or where the fees are included in the loan.

Conclusion

When anyone goes to get a 2nd mortgage loan it is best to know before hand what the property is worth, how much is left to be repaid on the loan, and whether it is best to stay with the current lender or to move on to a new lender. The first place to start is usually with the current lender because they may be able to waive certain fees as a gesture of good faith.

Do My 1st And 2nd Mortgage Have To Be Through The Same Lender?

Related posts:

Leave a Reply