Profile picture for kemerian

Refinance 1st only?

If you have a 1st and 2nd mortgage-can you only refinace the 1st?  Our home value has gone down like everywhere else but the house is worth more then the 1st mortgage...

Am I making sense?
  • April 02 2009 - Dove Canyon
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Answers (11)

Profile picture for surfinash

Spanky - understand the situation. It will depend on how long you have on current mortgage (ARM Vs Fixed). If you are in no hurry, then you can shop around a while.

You should pay points - agree with that. Instead, I would suggest putting that $ to work and bring the LTV down to 90% so you could be at 80-10-10. See if that makes any difference.

Buying another one next doors is a good strategy - if you can make both payments.

  • April 05 2009
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Profile picture for spanky25
Surfinash,

I been tring to refi. Im at 6.625 and a 800 credit score. About 95% LTV with 1st&2nd loan

Again, $221 for PMI plus 10K closing fees (NYS Mtg tax). Dishing out those funds to save less than $190 per month is not worth it. WITHOUT PMI, I would jump on it in a heart beat.

Any other options? Walk-away  and buy the house next door for 75K cheaper with an interest rate in the 4's?
  • April 03 2009
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Profile picture for surfinash
Spanky - things may not change with new programs as you will still need to follow the process.

In your instance, it may be better to either consolidate at a higher rate or pay off the second if it makes sense (and if you can afford it). But bottomline is - you should make every effort to ReFi in this market. Rates will only go up from here.
  • April 02 2009
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Profile picture for surfinash
You can ReFi only the 1st if the second lien holder agrees to subordinate.
  • April 02 2009
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Profile picture for spanky25

My second is with WAMU for 33K. I was told BEFORE the Obama plan that WAMU WILL NOT subordinate that loan. They suggested i combine the 2 loans. However, is was $221 for PMI !!!!

With the NEW Obama plan, I hope things change. Credit score is A++, I

  • April 02 2009
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Profile picture for surfinash

Correct. The second loan holder will cause a lot of trouble (already causing) as they decline to subordinate the loans. They will ask you to pay the second completely or refinance with them at a higher rate.

Also, in some areas (such as Bay Area), where most of the 1st loans are jumbo, there is a more than good chance that Freddie or Fannie will not own your loan. This will rule you out of the Govt benefit programs. So you are left with no choice other than:

- Pay down your loan to bring the debt below 80% (that is - on the existing loan value), OR

- Get a >80% loan at a higher (much) rate with PMI from the bank

The second option does not apply if your existing home value is less than the loan you currently have.

In all, you may have to fork out thousands of $ just to be able to qualify for refinancing a much depreciated property.

  • April 02 2009
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Profile picture for kemerian

Our second is with Etrade do you know how they are to work with on the subordination?

  • April 02 2009
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Not true the new loan may require MI although with the new refi plus program comming out next week as long as the loan is owned by Fannie or Freddie they will not require MI on the new first...The LTV cannot exceed 105%. 

The hurdle will be the subordination from the second and depending on who holds the second the requirements change.

  • April 02 2009
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Profile picture for kemerian

How do you proceed with doing this? 

  • April 02 2009
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Profile picture for dparkin
Andrew, I have been told that I cannot refinance unless the loan amount is 80% or less than the market value of the house.  Is this true?
  • April 02 2009
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The catch is the 2nd lien holder has to agree to subordinate to the new first mortgage.
  • April 02 2009
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