Question by Tek: Refinancing and Mortgage?
I have two mortgages on my home and I need to get another loan. Should I get one big loan to pay off the original two mortgages plus the new money I need? Or should I just tack on to my current 2nd mortgage the additional money I need. The first mortgage is at 5% and the second mortgage is at 8%.
p.s. I have enough equity in the home to cover the ‘new money’ I am seeking.
Answer by tinman97prn
A home equity line would actually be your best option (if you have enough available equity). Otherwise, as the 2nd has a higher interest rate, I’d try to get that one lower..
Know better? Leave your own answer in the comments!
You won’t be able to get any loan for more than the value of the house, so no “new money that you need”. It doesn’t work that way anymore.
Most lenders would not want to be added as 3rd mortgage. This is slim protection for the third.
You may refinance the 2nd, thus paying off the second mortgage and getting the money in that manor. Your interest rate would be about the same as your current 2nd mortgage.
You might consider refinancing both your current mortgages and getting the money you would need.. This is the best possible way to get a lower interest rate, in the neighborhood or your current 1st mortgage interest rate,or perhaps lower.
In order to make an intelligent decision, you would want your mortgage loan officer to explain your options with getting a first, second, third mortgage or an Equity Line of Credit (HELOC).
I hope this has been of some benefit to you,good luck.
get one loan that covers everything if you can. You save on interest, etc that way.