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I'd like to refinance my second mortgage. Does anyone do this anymore?

I have a first and a second mortgage; I recently refinanced the first mortgage. Both are held by Wells Fargo. The second mortgage is currently at 7.5%, with a balance of about $25,000.

I'd be happy to provide any relevant additional details.

  • December 15 2010 - Beverly
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Answers (2)

Best Answer

The answer is yes, banks can still refinance 2nd mortgages but things have changed quite a bit compared to a couple years ago.

Now the maximum CLTV (1st mtg + 2nd mtg / appraised value of the property) is much lower than they have been in the past. Where as previously you would have been able to get a new 2nd mortgage when the CLTV was as high as 100% now they are much lower and even getting 80% is rare (although some lenders do them).

The rates are also much higher than they were. I don't do a lot of 2nd mortgages anymore but off the top of my head I would say 7.5% is not a bad rate for a $25,000 2nd mortgage today. it may be better than anything out there right now. Especially if your rate is fixed at 7.5%.

If you want to look into refinancing this loan to get a lower rate the best place to start would probably be contacting Wells Fargo since they are the current lien holder. Because they already have your loan they probably have the most flexibility to refinance it for you and may have programs in place for current customers that no other lender could do.

Home this information helps...

Sincerely,
Greg

  • December 15 2010
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Typically the second is refinanced into a new first mortgage when you refinance, so I am assuming for some reason that was not possible. The good news is that at 7.5% you have a really good rate. Even if 6% was available the savings would only be about $20 monthly, but see if Wells has any viable options.  Just don't pay any fees or take a variable rate.
  • December 16 2010
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