Let’s say that a few years ago you ran into some problems with debt, and your credit rating took a big hit. Then in order to pay the bills, you had to take a second mortgage. But since then, we’ve been able to make a financial recovery, and have dutifully paid all of your bills on time. So now is it possible for you to refinance your high interest second mortgage?
The answer is, yes you absolutely can. Since a few years have already passed, you’re probably beyond the period of prepayment penalty. Now it’s time to save some money by refinancing your second mortgages. The good news is that this time you will probably be able to borrow at a lower rate of interest, thanks to your diligent work in keeping up your credit rating.
Now that your credit has been restored, you have a lot more options to choose from. Perhaps you want to combine the remaining balance on your second mortgage into a single mortgage payment, and completely refinance your home. This could be a very viable solution, especially with low interest rates in the current market.
The type of mortgage you get depends on your plans for the future. For example, let’s say that your living situation has changed and five years from now you probably will not be living in the same house. In that case it would make sense to look for a regular 30 year mortgage with an adjustable interest rate. Most of the time, this will result in a lower monthly payment, and allows for the possibility for your home to still appreciate in value when it comes time to sell.
Always remember, when it comes time to refinance second mortgage, you must always choose your lender carefully. make sure that you have examined a current copy of your credit report and that your FICO score is based on accurate information.
