Updated about 7 years ago on . Most recent reply
What to do to get rid of a 2nd mortgage on investment property?
We have a rental property that has two mortgages. The property was originally our first home that was purchased at the height of the market. We have been renting out the property for the last four years. However, we need to increase our cash flow and get rid of the second mortgage before the balloon payment. I have looked into consolidating both loans but one mortgage company said the house would have to appraise for at least 75% of the loan or something to that effect. I am not sure that the house will appraise for that amount. Any suggestions with how I can get rid of the second mortgage before it balloons?
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The 75% LTV is a typical requirement, but some banks will go north of 80% if you're willing to pay PMI. That will reduce your cash flow as well, though.
Is only the 2nd mortgage a balloon? Was this for renovating it to make it suitable for renters?
Do you have a reset option on the balloon?