The Refinancing Runaround
Homeowners who want to refinance their first mortgage may face a new hurdle: second-lien holders who refuse to "resubordinate" -- that is, agree to queue up behind first-mortgage holders and risk being left out in the cold if you default."The second-mortgage lender is under no obligation to do you that favor," says Keith Gumbinger, of HSH Associates.
Homeowners who want to refinance their first mortgage may face a new hurdle: second-lien holders who refuse to "resubordinate" -- that is, agree to queue up behind first-mortgage holders and risk being left out in the cold if you default.
"The second-mortgage lender is under no obligation to do you that favor," says Keith Gumbinger, of HSH Associates. He says lenders prefer that you close out your second loan altogether and pay it off. Gumbinger advises that you talk to your lender and emphasize that you've made your payments on time and that you're trying to refinance the first mortgage so that you can continue to make payments on the second.
Row 0 - Cell 0 | Am I Better Off Refinancing? |
Row 1 - Cell 0 | The Home-Equity Door Slams Shut |
Row 2 - Cell 0 | TOOL: Search Home Rates in Your Area |
If you can't refinance, take advantage of recent rate cuts and lower monthly payments to build up a reserve fund in anticipation of future rate increases. If your house has fallen in value, ask a mortgage lender about the FHASecure program, which may allow you to refinance your debt into a single mortgage with as little as 3% equity.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
More Real Estate Advice
-
It’s Tax Day: Is the Post Office Open Late?
Tax Filing Tax Day is here and some people need to mail their federal income tax returns.
By Kelley R. Taylor Published
-
Need to Build an Emergency Fund? Seven Steps to Get There
Having a safety net can mean peace of mind on top of being able to maintain your lifestyle if a financial emergency strikes.
By Justin Stivers, Esq. Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
Best Foreclosure Sites for Finding Properties
Making Your Money Last Wondering how to find foreclosed homes for sale for your next residence or to flip for a profit? These websites will guide you to foreclosures and real estate-owned properties to buy.
By Bob Niedt Last updated
-
Luxury Home Prices Rise as the Rich Dodge High Mortgage Rates
Luxury home prices rose 9% to the highest third-quarter level on record, Redfin reports, growing nearly three times faster than non-luxury prices.
By Kathryn Pomroy Published
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published
-
Five Ways to a Cheap Last-Minute Vacation
Travel Procrastinator? No matter. You can pull off a fun and memorable getaway on a moment's notice — without breaking the bank.
By Vaishali Varu Last updated
-
How Much Life Insurance Do You Need?
insurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life-insurance needs.
By Kimberly Lankford Published
-
When Is Amazon Prime Day?
Amazon Prime In 2023 Amazon had two Prime Day events — one in July and another, called Big Deal Days, in October. We expect 2024 to follow the same schedule.
By Bob Niedt Last updated