With lower interest rates the industry standard for real estate, taking out a second mortgage instead of refinancing the first mortgage has become more popular in recent years. A few years ago the average person was able to purchase a home at an 8.5 to 10 percent interest rate. These people stand to gain by refinancing at a rate that is now at 7 percent or less. It is advantageous to take a longer term mortgage and refinance that at a lower interest rate for a shorter term which will save you thousands of dollars in the long run.
A second mortgage is different in that the loan is secured by the same property as the first mortgage. Second mortgages are usually 5 to 15 years in length and allow you to get cash out of your home or purchase another home with the money from the loan. If you have a second mortgage on your home at a high rate of interest, it may be beneficial to check with lenders to see what they could offer you to refinance the second mortgage.
You want to have a relationship with whatever lender you select to refinance a second mortgage. In most cases, it is preferred that you look locally and work with a lender face to face so that should you have any questions they will be able to answer them quickly and specifically to your situation. Also a lender who works directly with you will be able to ensure that you are aware of and understand all the nature and requirement of all fees and closing costs associated with your refinancing transaction.
Good lenders are easy to find by discussing the matter with family and friends. The odds are that someone in your inner circle of influence has recently worked with a lender that they can recommend or refer or that they can provide substantial reasons as to why you should not utilize their services. With the popularity of the second mortgage increasing, this area of finance has become a target of scamming organizations and crooks. It is essential that you check references with others as well as state and federal business trade regulator commissions to confirm the reputation of your potential lender prior to doing business with them.
Knowledge and the application of the same determine the ultimate success of the mortgage refinance. If this seems overwhelming, begin interviewing lenders who can discuss your specific needs and give you the answers and solutions you need. See below for more information on Second Mortgage Refinance.