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How hard is it to subordinate a second loan? Can I call the mortgage company to findout..

I like to refinance my first and apply the cash I have into the 1st mortgage.. But will the 2nd subordinate?
  • September 20 2013 - Fairfax
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Answers (5)

It sounds like you are wanting to reduce the balance on your first mortgage, which would in-turn, reduce the risk to the 2nd lien holder.  If this is the case, they should have no problem subordinating for you.  It's your mortgage originator's job to work on the subordination for you.  If they are experienced, this will be a walk in the park for them, and you have nothing to worry about.
  • September 20 2013
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I am pretty sure VA statutes require lenders holding seconds to subordinate if the loan amount is 50K or less. Over 50K and it is a decision your second trust holder may make.
As previously stated, if you are refinancing your first, that lender will handle the negotiations etc.

Best wishes, Jim

  • September 20 2013
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Profile picture for GMerino
You can call your second mortgage to find out what is the process.  Do you have enough equity to refinance your first and subordinate your second?  I am assuming that you do as you know the terms.  For the most part you will not have a hard time in subordinating the second. 
  • September 20 2013
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That's the lenders job.  You do not need to call them.  I am not really sure they will even talk to you about it.  You would need an approval to even do anything to start the process.  It is pretty easy and there is usually a fee between $100 and $200 to get it completed.
  • September 20 2013
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Profile picture for Outer Banks N C
You need to call them and ask. I bet they will want to be paid off when you refi, but let them decide.
  • September 20 2013
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