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What is the difference between refinancing and a second mortgage?
Wiki User
∙ 15y ago
Refinancing is re-assessing the terms of your current mortgage. You are capable of refinancing any loan at any time whether it is a home, auto or personal loan. A second mortgage is a mortgage in addition to your primary note. If you obtain a second mortgage you will be liable to pay two monthly mortgage payments.
Wiki User
∙ 15y ago
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Which banks offer refinancing on a second mortgage?
Banks that offer refinancing on a second mortgage include TD Canada Trust, Scotiabank, Bank of Montreal, Royal Bank, Bank of America, Citi Bank and CIBC.
How does one go about refinancing a second mortgage?
Options are very limited when one needs to refinance a second mortgage. All they can really do is talk to the financial advisor/institution for which they have their current mortgage under.
What are the disadvantages of refinancing a second mortgage?
The disadvantages of refinancing a second mortgage may be that the original fees, such as appraisal fees, closing costs, attorney fees, recording fees and title insurance may have to be paid once again. It is worth remembering that the interest fees saved may far exceed the small cost of repaying refinancing fees.
Where can one find information on refinancing a second mortgage?
One can find information on refinancing a second mortgage in the finance sections of broadsheet newspapers like The Times, The Daily Telegraph and The Guardian. One can also find specific information on lender's sites such as banks and building societies.
Why does the second mortgage holder have to approve of the first mortgage refinance?
The second mortgage holder typically needs to approve the first mortgage refinance because they hold a subordinate position to the first mortgage. Refinancing the first mortgage could impact the second mortgage holder's position, so their consent is often required to make changes to the primary loan.
What is the difference between a fixed second mortgage and one with a variable rate?
The difference between a fixed second mortgage and one with a variable rate is that fixed second mortgage has a fixed rate and is commonly thought of as safer than a mortgage with a variable rate.
Which banks offer refinancing on a second mortgage?
Banks that offer refinancing on a second mortgage include TD Canada Trust, Scotiabank, Bank of Montreal, Royal Bank, Bank of America, Citi Bank and CIBC.
How does one go about refinancing a second mortgage?
Options are very limited when one needs to refinance a second mortgage. All they can really do is talk to the financial advisor/institution for which they have their current mortgage under.
What are the disadvantages of refinancing a second mortgage?
The disadvantages of refinancing a second mortgage may be that the original fees, such as appraisal fees, closing costs, attorney fees, recording fees and title insurance may have to be paid once again. It is worth remembering that the interest fees saved may far exceed the small cost of repaying refinancing fees.
Where can one find information on refinancing a second mortgage?
One can find information on refinancing a second mortgage in the finance sections of broadsheet newspapers like The Times, The Daily Telegraph and The Guardian. One can also find specific information on lender's sites such as banks and building societies.
Why does the second mortgage holder have to approve of the first mortgage refinance?
The second mortgage holder typically needs to approve the first mortgage refinance because they hold a subordinate position to the first mortgage. Refinancing the first mortgage could impact the second mortgage holder's position, so their consent is often required to make changes to the primary loan.
What is the difference between a first lien and second lien mortgage underwriting process?
A second lien mortgage occurs when a lender is willing to impose a lien on an asset that already carries a lien with another creditor. An example of a second lien mortgage is a second mortgage being taking out for property. If a person does not make payments to either lender, the first mortgage is settled before the second mortgage can be settled,
What is home equity loan refinancing?
Home equity loan refinancing means paying off an existing mortgage with the proceeds from a new loan, using the same property as collateral. It is a second mortgage. It is important to note that you may be subject to the same costs you paid to get your original mortgage, including settlement costs, discount points and other fees. A prepayment penalty may apply for paying off the original mortgage early. The amount you save will vary depending upon factors such as interest rates, refinancing costs and tax consequences. Borrowers may have the option to refinance from an adjustable rate mortgage with a high interest rate subject to increases to a lower fixed-rate mortgage.
How do you renegotiate a second loan?
{| |- | If your current mortgage has a high interest rate, you're stuck in an adjustable rate mortgage, or you want cash out or to consolidate your debt, the answer to your mortgage problems is refinancing. Mortgage refinancing allows you to pay off the remainder of your existing loan by taking on a new loan with better terms. You can even opt for Debt reduction programs from Freedom debt relief to get out of debt. |}
What is a stand alone second mortgage?
A stand alone second mortgage is a second loan taken out against your home when you already have 1 loan on it. The only difference is that the second loan was closed at a later time.
How to qualify for mortgage refinancing?
Over the past few years, the poor economy has led to the federal government cutting key interest rates to the lowest point ever. While this has limited the rates on can receive in zero risk savings accounts, it has also pushed down mortgagee rates. Due to low rates, mortgage refinancing makes more sense now than ever before. While it would be a great idea to refinance a mortgage, the credit crunch has made it quite difficult. To qualify for mortgage refinancing, there are several financial based factors that you must meet. The first financial factor that you must meet to qualify for mortgage refinancing is a good credit score. Your credit score is a barometer of your credit history, and reflects how well you manage credit, and how frequently you were late on payments. Since this a reflection of you well you handle yourself financially, banks will use this as a significant determining factor towards whether or not you will be approved for mortgage refinancing. To qualify for mortgage refinancing, you will need a credit score of at least 680, and 740 to get the best rates. The second financial factor that you must meet to qualify for mortgage refinancing is how much equity you have in your home. A few years ago, many people received mortgages with up to 105% financing. This coupled with falling home prices, has led to many people having underwater mortgages. To qualify for mortgage refinancing, you will normally need to have positive equity in your home. To get the best rates, and avoid paying private mortgage insurance, you will need to have at least 20% equity. The third financial factor that you must meet to qualify for mortgage refinancing is your home affordability. In years past, banks would not allow a person to purchase a home if their total housing costs were more than 40% of their monthly gross income. Due to a high rate of default, that guideline has fallen to between 28% and 33%, depending on the lender and mortgage product. So, if you make $10,000 per month gross, your monthly payment may not exceed $3,333.
What is the Difference between a Junior Mortgage and a second mortgage?
The difference is really all in how the loans were originated. A junior mortgage refers to the lien placement on the property title. A second mortgage means a mortgagor has more than one loan on a property with the same lender. For example, If I purchase a home (assuming the title is clean and there are no liens on the title) and get the loan with ABC Bank then ABC Bank is considered the senior mortgage. If I obtain another loan with ABC Bank most commonly a HELOC or Home Equity Line of Credit then it is a second mortgage in second position. Let's say that after I obtained the second loan with ABC Bank, I chose to take out a smaller loan against the property with XYZ Bank. That loan will be considered a junior lien. The loans won't always fall that clean on the title however. You can have a junior lien between a senior lien and second mortgage. In the example above if the XYZ Bank loan was taken out before the second mortgage with ABC Bank then it would still be called a junior lien and the second mortgage with ABC Bank would be the second mortgage with ABC Bank but in third position. Hope that helps!
