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Profile picture for tiger3599

Refinance - Subordination

I'm refinancing my 1st mortgage with another lender, but first CITI has to subordinate the 2nd loan. It could be another 40-50 days before the subordination is complete. Could i bring over the 2nd to the new lender and still just refinance the 1st as wouldn't it allow me to refinance quicker? I'm guessing to bring over the 2nd if allowed would only cost $700-$1000 (2nd mortgage just $27k)?
  • July 06 2009 - Algonquin
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Answers (5)

Profile picture for homeafford
I'm in the same spot.  Waiting for the subordination of my 2nd.... Citi is SO SLOW!  does anyone know why it takes so long to complete?
  • July 14 2009
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Profile picture for Lindsey M. Bishop
Well what about a FHA refi?

If you refinance into a FHA loan you can go up to 97% loan to value to combine your first mortgage and second mortgage together into one loan as long as you have not opened or borrowed against your 2nd mortgage in the last 12 months. That means if you appraised at $260,000 your maximum loan amount would be $252,200.

How much do you owe on the 2nd mortgage? When did you open it or use it last?

FHA offers a 5/1 ARM and 3/1 ARM also - I think the 3/1 rates were at 3.75% today with a small buy down I haven't seen 5/1 rates today though.
  • July 09 2009
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Profile picture for tiger3599
Yes, unable to roll 2nd into first mortgage

Appraisal for townhome came in at 260,000
1st morgage principal balance 218,000
credit score 800
I want to do a 5/1 ARM and get into low 4s rate wise
I have been approved for Fannie Mae Refi +
Waiting on CITI to subordinate 2nd mortgage and it's already been since end of May

So many hurdles, any advice and will this be possible?
  • July 09 2009
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Profile picture for Lindsey M. Bishop
How much do you owe on your first mortgage? What did your appraisal come in at?

You are most likely subordinating because you do not have enough equity to refinance your second mortgage into a new loan. You may not have any other options but for Citi to approve the subordination in order to refinance your first mortgage.  
  • July 09 2009
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The new first lender is unlikely to have any interest in creating a concurrent second, unless you have a very strong equity position....and if that was the case, you wouldn't need the subordination in the first place.

Another option is to refinance the new first with the lender who already has the second (opposite of your plan).  This can help speed up the process when they can communicate within their own corporate network.
  • July 06 2009
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