If I have a first and second mortgage, is it wise to combine the two?
Robert J asked:
My first is a 30 year fix at 5.6% , my second is fixed too but really high interest rate, 15.6%. Together I am paying roughly $1400 a month!
Oscar
My first is a 30 year fix at 5.6% , my second is fixed too but really high interest rate, 15.6%. Together I am paying roughly $1400 a month!
Oscar
July 25th, 2009 at 12:01 am
Floyd
you shouldnt touch the first!
but definitely refinance the second.
the rates today are around 6.25%…….
you could wait to refinance the 2nd mortgage….and hope the FED lowers the prime rate again.
July 27th, 2009 at 3:55 pm
Aaron
It depends on how much on the 1st, and how much on the 2nd. Calculate the payment if combined, then, factor in the closing cost. The best thing to do is to get a GFE from one of the loan officers to compare. Another alternative is getting a Home Equity Line of Credit from 1 of your local bank or Credit Unions with lower interest to pay off the 2nd.
July 28th, 2009 at 10:28 am
Dolores
Robert
u got scammed on the second.
suggest u contact ur bank about rolling the 2nd in. get 2 more jobs to get a head, great place to go when in debt slavery. visit daveramsey.com to learn what the banks do not want u to know, now.
July 31st, 2009 at 11:14 am
Shane
That all depends on the value of the house? How much are the 2 loans? Sometimes it is cheaper to pay 2 loans a month than 1 . Look at the interest rate they are charging.
How much Principle and Interet a month would you have to pay? You do the math from there.
August 2nd, 2009 at 4:36 pm
Karl
It would be wise to combine them into one mortgage if your LTV (loan to value) is lower than 80%. What I mean by this is… Say your home is worth $100,000 but you owe only $80,000 on it. Then your LTV at that point would be 80%. At 80% you wouldn’t have to pay MI (mortgage insurance). More than likely it would save you a couple hundred bucks a month.
Any questions you can give me a call.
Mark
Atlantis Financial
(866)272-6291
August 3rd, 2009 at 1:12 pm
Pedro
Well to determine if it’s a good deal for you we’d need some more specifics. It starts with how much of your debt is at 5.6% and how much is at 15%, then you need to look at what rate you’d qualify for on 1 loan to cover the total. Don’t forget to add in the PMI cost if you’re over 80% of the value of your home.
Basic formula to get you started….
blended rate(the real interest rate you’re paying now)
(1st mortgage balance/total balance x 5.6%) + (2nd mortgage balance/total balance x 15%)=blended rate.
That number will give you a better idea of what kind of rates to compare it to in order to tell if you’re saving any money on interest.
I would expect that you could save money by doing a refinance, especially if your new loan wouldn’t be over 80% of the value of your home…but that really would depend on what you’d qualify for now.
August 4th, 2009 at 8:10 am
Gregory
The answer is that it should definitely be east to save money if you have a rate that high on the second. I am guessing your total purchase was around $200,000 if that is your payment. Depends on how long ago you bought it. If you have owned it in most cases for more than 12 mos than it makes sense. Rates are still in the low 6’s… Last question is - how long will you keep it? You will incur closing costs for the new loan that may not be worth the savings if you only plan to keep the home for another year or so… The rate on that second is huge, so I would look in to something. Be glad to help if in Florida
August 5th, 2009 at 2:58 pm
Annette
here is how you calculate your average rate
5.6 x .8 is equal to 4.48%
15.6 x .2 is equal to 3.12%
your actual rate is 7.6 %
if you can refinance and your interest rate is lower by 1% then you should refinance . If you cant do that due to credit or Loan to Value I would wait and refinance after the termoil in the industry calms down with lower rates and better programs that should be availale in January 2008 if you have more questions just e mail me at