The mortgage on my investment property is adjustable, and I would like to take advantage of the current rates. I cant refi the whole mortgage because now the property is worth less than the loan amount. Can I get a new (fixed) mortgage for say, half the balance of the existing mortgage, and pay down half of that first mortgage, leaving me with the same overall balance, but now two mortgages, one adjustable, and one fixed?

No. If you paid $120K for a property 3 years ago, put 20% down, and financed $100K and now the property is worth $95K you have no equity. The only way you would get a second mortgage was if the property was now worth $150K, meaning 80% equity would be $120, and then you then you could maybe get a 2nd for the difference between what you owed ($95K) and the 80% equity ($120) for a total loan of $25K. And that is speaking owner occupied, for an investment property it is probably more restrictive on the ratios. See if you can get your original mortgage refinanced.

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I was offer a interest rate of 6.87 for 15 years in 89000.00 with a payment base in 30 years with a balloom payment of 66000.00 in the end of the 15th year. I want to know if I can refinance in few years the second mortgage and get out of the balloom payment.
Now I am traing to consolidate a second mortgage and a line of credit, wichone I only paying interes, nothing agains the credit line

If you are going to refinance your first to payoff your second, then you need to make sure that you do not have a prepayment penalty on either loan. You can refinance your balloon second at anytime provided that you do not have a prepayment penalty stating that you will not pay the loan off or refinance within XX years (prepayments are usually 2 to 3 years depending on the state in which you reside). Prepayment penalties can be costly – usually about 6 months of interest. Balloon loans that are 30 years due in 15 years (360/180) means that the loan is amortized over 30 years but the ballance will be due in 15 years – your payments are based on a 30 year pay term. Verify whether or not you have a prepayment penalty (you can look through your mortgage documents) and you can refinance at any time provided you do not have a prepayment penalty

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All short sales create a deficit – by definition they sell for less than the mortgage balance. As the first mortgage is superior, the second mortgage would bear the full brunt of the shortfall until exhausted. So that makes the potential for the 2nd mortgage holder accepting a short sale far more difficult unless the amount of the loss is reasonable.

However, even in a foreclosure, the second mortgage is fully exposed to the loss first so it all depends on how reasonable the holder of the second mortgage wishes to be. If you have an actual purchase a a specific price, the 2nd mortgage can at least determine the loss and compare it to what would be expected to be realized, if anything, from a foreclosure, offsetting the expenses and time delay of the foreclosure.

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let me explain a little more when we bought the home they gave us 2 seperate mortgages one for $180,000 and one for $40,000 we want to sell the house to my girlfriends sister and she is gonna let us still live there.So if we are still paying the second mortgage wouldnt that be fine??

no

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http://www.SixFigureShortSales.com In this quick example, Greg shows how you can get the 1st mortgage to pay the second mortgage up to $10,000 as a total payoff, rather than their usual $1,000.

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I need to transfer my second mortgage to my new home so I can lower my asking price for my unsold home. I am currently paying 2 mortgages and a second mortgage. Is there a way to transfer my second mortgage to my new home? I have only lived in my new home for 4 months and finances are getting tight. The equity is low to none in the new home.

You’re in a situation that a lot of people are facing right now and there are more than a few solutions to your problem.

1. You can obtain a loan for 105-125% of you new homes value. This may or may not be enough to pay off your existing second mortgage but it may help pay down your second mortgage enough to lower your asking price. Keep in mind that the rate associated with this may be higher than what is typical for a second mortgage on a home with more equity.

2. You may, on the other hand, want to consider a short sale on your old home. A short sale is where you contact the bank on your second mortgage and have them agree to take less than what you owe. This may affect your credit in a negative way, however, it won’t be as bad as a foreclosure.

3. Your third choice, is to refinance your old home and get the cash you want/need and then rent it out. This might have some tax benefits that you should talk to a CPA about. If you got into a good loan, then you would not only have your equity but you could rent out your old home for more than your monthly mortgage obligation.

I hope this helps. If you need more info, feel free to email me for my phone number.

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If used properly, there may not be a more effective financial option a homeowner can exercise than to take a second mortgage on their property. More and more American consumers have become aware of revolving debt and the implications it can have on them and their loved one – not just now but in the future.

Second mortgages can be used for practically anything, but they are most typically pay for outstanding education expenses, repairs of your home or property, to procure higher value real estate, and to pay off high interest rate credit cards as well as to consolidate or eliminate other debts.

Naturally, it wouldn’t be fiscally sound to take out a second mortgage if it would not be in your best interest as a homeowner. With so many refinancing, borrowing, and other transaction options available to the modern consumer, when is taking out a second mortgage the right way to go? A second mortgage is a good choice for the homeowner who has a need for a substantial amount of cash and also has sufficient equity in a home.

Essentially, a second mortgage is a second lien against the value of the property, one which is paid back in monthly installments exactly the same as was the case with your first mortgage. Unlike the interest on unsecured loans and credit cards, second mortgage interest is generally tax deductible, and is therefore a viable solution to rid yourself of high interest rates which is often associated with other forms of debt.

An often overlooked nuance of obtaining a second mortgage is the very same due process which was involved in the first. All too often homeowners will take out seconds from the same financial institution used to obtain the initial mortgage. This stands to reason, as the mere thought of mortgaging your home once is overwhelming enough for a surprising amount of individuals who might otherwise benefit from the act to avoid it altogether. A second mortgage, though, is a very important financial decision (just as, if not more important than the first) and should be treated with the same diligence and research as the first. Obtaining information through several lenders or brokers on the second mortgage regarding residential mortgage loans such as; how much can you afford, as well as ascertaining how much of a down payment you will need, and find out all the costs involved in the loan is as vital to the process the second time around as it is the first. Simply seeing the monthly payment or the interest rate on the lien itself is not enough. Knowing information about the same loan amount, loan term, and type of loan will allow you to compare the information from each lender and broker.

Do your homework; get a hold of the current mortgage rates and understand whether the rates are being quoted the lowest for that day or week. Question whether the rate is fixed or adjustable, keeping in mind all the while that interest rates for adjustable-rate loans go up, which will also make the monthly payment go up. If the rate is quoted for an adjustable-rate loan, determine how your rate payment will vary. Again, these factors are as important during the process of obtaining a second mortgage as they are during the first.

You might find that in considering a second mortgage, your financial situation would also lend itself to potentially refinancing a portion or even all of your existing debt. While serving essentially the same purpose as a refinance, a second mortgage can oftentimes be a more efficient and, ultimately inexpensive consolidation option. Of first and foremost concern to most with enough debt to consider a second mortgage on their home to pay off debt, a second mortgage enables you to eliminate high interest debt much more quickly than would be possible with a refinance alone.

The principle advantage of taking a second mortgage is its ability to allow the accomplishment of a specific goal, including but not limited to a reduction in the amount of interest being paid on credit cards (the principle reason homeowners choose a second mortgage as their most effective and efficient consolidation option). If the lien has a shorter pay-off term, the homeowner can look forward to one payment when the second mortgage is paid off. Once the decision is made that the goal is worth the investment, homeowners should shop for the right second mortgage lender, making sure that the one they select is reputable, responsive to their specific needs, and willing to discuss all of the costs up front. Keep in mind that these decisions have serious implications on your credit and foreseeable financial future. If your payments remain regular you’ll alleviate most of the interest rates pertaining to the loan and raise your credit rating.

Unfortunately, second mortgages are far from federalized; they vary widely from state to state and private institution to institution. Nearly as important to performing regular due diligence in observing and researching companies which you might do business with in obtaining a second mortgage is to ascertain the nature of state laws which may or may not limit the capabilities and rights you have as a consumer. In some states, for example, second mortgages do not require borrowers to have equity in their home and many new loans are available up to 125% of value of the security in question (of your home). Many consumers have also found these loans useful for paying off their bills, making home improvements, and taking out funds from the loan for personal use. In other areas, such policies are not possible. Ignorance of a state’s laws or financial regulations may not be used as an excuse and will not protect you from excessive obligations or pitfalls which may result from problems which arise down the road.

A second mortgage is more often than not the best option available for homeowners with large amounts of unsecured debt. Realizing the nuances of the mortgage process can not only help you to evade some of the problems you may have encountered during acquiring your first mortgage, but use the process to benefit you financially in the long run.

Gary Carraghan
http://www.articlesbase.com/real-estate-articles/second-mortgage-can-offer-fast-cash-piece-of-mind-92072.html

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What would cause a person to take out a second mortgage on their home?

Before the "Credit Crunch" 2nd mortgages were a common way of avoiding mortgage insurance when you didn’t have 20% to put down on the purchase of a home. Those were the first casualties.

Today Home Equity Lines of Creidt (HELOC’s) do exist for preferred borrowers with equity in their homes. They work similarly to credit cards, in that you have a credit line, which you can use for anything you want. Often the first 10 years you pay interest only and then the last 20 years, you can’t charge on them and have to start paying back the principal plus interest.

I think every homeowner with equity should have one established. If you don’t draw on it it costs you nothing, except perhaps a small maintenance fee. It’s like having free insurance in case you run into a financial problem, like a job loss or illness. As I tell my clients, when you NEED it you might not qualify for it.

Because home values have been declining, many HELOC’s have been frozen or credit lines reduced and many lenders have stopped offering them.

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http://www.bills.com/videos/ Bills.com President, Ethan Ewing, discusses the consequences of defaulting on your second mortgage payments and explains what to do in that situation. Learn how to resolve your mortgage payment problems as well as other personal finance issues with bills.com.

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A second mortgage just means that it is the second loan that is secured against your home. This is not a good thing to have as you not only have a lot of debt to pay off, but your home is at risk if you could not pay off your loans completely.

The interest rates are higher on the second loan but the bank charges will be less as there is already a loan registered on your name. To qualify for this loan is much the same as qualifying for the first loan. Your credit history will be checked and you will have to answer a questionnaire about your employment status and your monthly income and expenditure. The money can be paid to you in a lump sum or you can open a line of credit and use the money as you need it.

Very few banks give prospective property buyers a loan for the full purchase price of the property. The balance has to be paid by the buyer in cash. If you did not have a deposit and you discovered the home of your dreams you would want to buy it immediately as the seller would not want to wait for you to first save up a deposit. In a case like this the bank would allow you to take a second mortgage to pay for the deposit. In a case like this it justifies taking a second loan on your home.

The loan can be used for home renovations. There are always repairs and improvements that must be made on the home. The cost of building is very high and it is better to borrow the money and get the jobs done than to put it off while you are saving the money. Before embarking on home improvements, first get quotes from the building companies and building suppliers concerned so that you know what the project will amount to. This will help you budget and not waste any money. The line of credit will work well in this case as you can pay for labor and building material as you need to. The line of credit works much like a credit card.

Lee Van
http://www.articlesbase.com/loans-articles/second-mortgages-is-this-a-bad-thing–89450.html

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