| If you're looking into refinancing your home and have a | | | | around. Just be sure to talk to your mortgage |
| second mortgage or a home equity loan or line of | | | | professional and the new mortgage company about |
| credit, in some cases you may be out of luck. | | | | your desire to refinance your primary mortgage. If the |
| If you want to refinance your primary loan, you first | | | | new mortgage company for your secondary loan is |
| must convince the lenders holding any second position | | | | no more agreeable to remaining subordinate in a |
| loans to agree to continue to be in a subordinate | | | | primary mortgage refinance, you'll be back in the same |
| position behind the new primary loan. This is called | | | | position you started off at, if not worse. |
| Subordination. | | | | If you are planning on refinancing your primary loan and |
| When the housing market was in an upswing, getting | | | | have a second position loan such as a second |
| lenders holding second position loans to agree to | | | | mortgage, home equity loan or home equity line of |
| subordination wasn't much of a problem. In many | | | | credit, always be sure to contact the lenders for your |
| cases it wasn't even necessary to ask second | | | | second position loans first. They will take a look at |
| position loans to be carried over because the home | | | | your loan, the market in your area and your financial |
| may have increased so much in value that the second | | | | situation. They will then let you know if there are any |
| mortgage or home equity loan could be paid off in the | | | | changes that they will require in order to agree to |
| refinance. Even if a homeowner requested that a | | | | subordination behind a new primary mortgage. |
| second position loan be carried over in subordination to | | | | If you don't contact your second position lenders |
| a new primary loan, the home's increasing value made | | | | before attempting to refinance your primary mortgage, |
| the lender much more likely to agree to a position of | | | | you may end up in an uncomfortable position once the |
| subordination. | | | | secondary lender is informed of your pending |
| With the current housing market, this is no longer the | | | | refinance. Knowing in advance what your secondary |
| case. Secondary position lenders are now much less | | | | lenders would require before agreeing to subordination |
| likely to agree to remain subordinate. Some will only | | | | rather than finding out when the refinance is in process |
| agree to subordination if you first pay down the | | | | will put you in a much better position. Having to stop a |
| principal on the second position loan, which puts them in | | | | refinance in the middle of the process will end up being |
| a better risk position. | | | | a waste of time, as well as a waste of money. You |
| In other cases, you may have no choice but to | | | | will still be responsible for paying for the refinance |
| refinance your secondary loan. This is an option worth | | | | work that has already been done as well as any |
| looking into, especially if it means a lower interest rate | | | | related fees that have been necessary up to the point |
| or a savings on your monthly secondary loan payment. | | | | where the refinance was stopped. |
| The process of refinancing a secondary loan is | | | | Be sure you know all of your responsibilities and |
| essentially the same as refinancing your primary | | | | options before you proceed with a refinance, |
| mortgage. If you choose this option, you'll need to shop | | | | especially if you have secondary position loans. |