Second Mortgage Refinance Tips

January 5th, 2009

Tip! Make sure your loan doesn’t carry a pre-payment penalty, or it will cost quite a bit extra to refinance later on.

Most homeowners apply for a second mortgage or home equity credit line when they need money for consolidating bills and refinancing credit cards. Some borrowers seek second mortgages for financing home construction or making home improvements. Most people who own a home will consider remodeling and making home improvements at some point in the first 5 years of owning the home. These days, the most popular second mortgages are fixed interest rate equity loans that are also consider simple interest installment loans or second liens. People looking for a safety emergency account or usually secure a home equity line of credit, because you only pay interest on the portion you access. These 5 tips will help you with the 2nd mortgage loan process:

1. Compare offers from several home equity lenders or mortgage brokers to determine which second mortgage is the best choice.

2. Make sure you discuss with your loan officer what goals you are trying to accomplish with this equity loan. (Your answer will dictate which type od second mortgage makes sense, ie. fixed rate equity loan or line of credit)

Tip! If you have high interest loans or credit cards you need to refinance right away. It may seem like you are not accomplishing much by refinancing and paying off your high interest loans or credit cards, but you are saving so much money.

3. Clean up your credit report for errors and get your FICO scores prior to needing the loan because lenders will determine your interest rate with your credit score playing an important factor.

4. When applying for a second mortgage you will get a loan checklist from your mortgage broker containing the list of paperwork you need to close the loan, including:

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Entry Filed under: Refinance Loans


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