If the opportunity arises for you to consolidate your first and second mortgages into one loan at a lower interest rate, resulting in lower monthly payments without the need to add mortgage insurance, you should jump on the opportunity. Why? Well, the truth is that it’s not that easy to accomplish since most homeowners don’t have enough home equity to consolidate both mortgages.
You can save money when you consolidate your mortgages into one secure mortgage because they generally carry higher interest rates. When you consolidate them, you can secure a lower fixed rate.
How-to Combine Two Mortgage Into One
In the past you may have took out a second mortgage to pay off your debt or make a large purchase. In doing so, it’s likely your monthly payments may now be doubled and you want to decrease the amount you pay each month or you could just be looking for better terms.
To consolidate your first and second mortgages at a lower interest rate, you’ll first need to seek the help of your mortgage broker. They’ll start by:
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Examining the loan terms you have on your current mortgages
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Getting in touch with your current lender to help them determine the costs of refinancing to ensure that not costs are omitted and all are accounted for during their calculations
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Scheduling a home appraisal
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Determining additional costs and fees for prepayment of your current loan
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Housing market research will also be used to determine your home’s equity, since there must be enough equity available to pay off your second mortgage when consolidating both mortgages
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Conducting a loan rate and fee comparison, among a variety of lenders
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Applying for the cash-out option loan, so you have the funds required to pay off your first and second mortgages
The Benefits of Combining Your First and Second Mortgages
Obviously the major benefit to combining your two existing mortgage is to save money. On top of this there are a number of other benefits that come along with this decision, including:
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Lowering your monthly payments
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Securing a fixed rate mortgage with a lower interest rate
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Shortening the life of your loan
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Eliminate a large amount of interest in the long-term
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Interest rates may be tax deductible
Although there will be costs to consolidate your first and second mortgages, you can expect to recover them through the life of your new loan.
We’re sure you have many questions if you’re considering this type of refinancing. We have the knowledge and experience to answer them and put your mind at ease. Speak to a mortgage professional today.
When we say Yes! We stand behind our promise.
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