Hoping to get some insight into financing...
I have two mortgages on my primary residence. One is for $320k at 6.0% for 2.5 more years (private money) and the payment is $1950. The second is for $85k at 3.0% (substituted collateral from a flip I did earlier this year and placed the debt to my primary residence) and the payment is $917. At the time, my prior two years tax returns were not good enough to get a traditional loan, so I bought it using creative financing. However, after 2018 and 2019 tax returns, I feel very confident I will be able to qualify for a loan for 400k. I own the house and am on title, my lenders are in first and second lien positions.
Primary residence is worth around $575k. The first mortgage is coming due in the next few years. The second is amortized over 10 years and will be paid in full in 9 years if I keep it in place.
My question is -- Will lenders allow me to just refinance out the first mortgage of $320k? Or do I need to roll both mortgages into one lump refi?
I do like the idea of keeping the second mortgage in place (even though it is a high payment) because every payment of $917, my balance is reduced by about $700.
Also-- what kind of fees go along with refinancing this mortgage? Obviously an appraisal and credit check, but what else?
Thanks so much BP! I enjoy getting the opinion of you guys first before approaching a local lender who may be narrow minded.
I don't know why you would like the idea of a second mortgage at 6%. Isn't the best thing to do to save money so you can reinvest?
You can do that as long as the second mortgage company is willing to subordinate. You would significantly lower your interest rate with the first mortgage and the refinance would be well worth it.