Agent Blogs

Many people have a second mortgage, whether by itself on a vacation home or as an addition on their primary home.  Often this other mortgage involves less money that the first, and in some cases it may have a higher rate.  So in many cases people concentrate more on their primary mortgage than they do on their second, not as concerned about a second mortgage refinance.  We suggest that it might be worthwhile in some instances to pay more attention to the possibility of a second mortgage refinance.  Here is some advice:

1. Keep an eye on rates with a second mortgage refinance the same way you would with a first.  In other words, if your decision regarding your first is that you need to save 3/8 of a point or more, then the same rule should hold for a second mortgage refinance.  It should not matter too much if the second has less money involved…unless…

2. The terms of the second mortgage refinance may be different from the first.  Given that there is less money involved or that the bank is taking a higher risk on you by lending you money above and beyond the first, there may be higher fees or otherwise terms that are not favorable.

3. Of course you need to assess your second mortgage refinance in terms of how long you will keep the property if it is not your main home.  IF there are fees involved make sure that your savings will be well beyond the length of time it takes to recoup those fees.

4. Finally, before looking into your second mortgage refinance, and especially if your second mortgage has a high rate, you may want to look into a first refinance that will pay cash back that pays off your second.  Note that you may lose some tax advantages this way so you would need to do your homework.

For any specific questions related to your own situation, please contact me at 519 621 4852.