What is the difference between a second mortgage and a refinance?
gwizzle2002 asked:
I am financing a pool and was told by the lender that a refinance and a second mortgage are the same thing. Is that correct?
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I am financing a pool and was told by the lender that a refinance and a second mortgage are the same thing. Is that correct?
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Tags: Mortgage Financing, Mortgage Refinance, Pool
September 26th, 2008 at 8:35 am
No. A refinance gives you a new mortgage with a lower interest rate.
A second mortgage is a mortgage taken out on property that already has one mortgage, with priority in settlement of claims given to the earlier mortgage. In other words, you have two mortgages.
September 29th, 2008 at 1:20 am
A second mortgage would be a loan in addition to your primary mortgage where your home is the collateral for the loan. A home equity loan could be described as a second mortgage.
A refinance would be getting a new mortgage with new terms. When you refinance, you pay off your prior mortgage and start with a new one.
September 29th, 2008 at 10:11 pm
The LENDER told you that??? You refi your current mortage (usually to a lower oercent and remove some equity to pay for your pool), but you can open a new, seperate SECONDARY mortage to pay for your pool too.
October 2nd, 2008 at 12:59 pm
Pretty much: yes. Differences lie (no pun intended) in the intrest percentage charged. And there may be options from the lender to “sell” your mortgage/refinance case to another bank, who then can RAISE the intrest owed.
Check the fine print and ask a trusted investment attorney for laymen’s explanation of any such deals; laws vary from state to state.
In the end, they both meet one end if you default on the deal: you lose your house.