Martino Law Group

Melrose MA Attorney Specializing in Real Estate, Family Law, Personal Injury, Business Law, and Estate Planning

Call Now (781) 606-9002
Info@Martinolawgroup.com

  • Real Estate
  • Family Law
    • Divorce
    • Child Custody & Visitation
  • Personal Injury
    • Auto Accidents
    • Catastrophic Injuries
    • Medical Malpractice Attorneys in Melrose MA
    • Work-Related Injuries in MA
    • Wrongful Death Cases in MA
    • Other Injuries
  • Estate Planning
  • Business Law
  • Probate
  • Criminal Law
  • About
    • Contact
    • Blog
    • Privacy Policy
    • Testimonials
Home » Real Estate » Mortgage » Refinancing a First and Second Mortgage – What You Should Know

Refinancing a First and Second Mortgage – What You Should Know

July 28, 2020 By John Martino

With interest rates so low, many homeowners are choosing to refinance. The option is pretty straight forward when you have just one mortgage, but what happens when you’re interested in refinancing a first and second mortgage? The answer is, it depends.

Timing of the Second Mortgage

Sometimes you can refinance into a new loan that pays off both your first and second mortgage, leaving with you one simple new loan to worry about. Other times, you’ll only be able to refinance the first mortgage, leaving the second one intact. The determining factor is when you obtained that second mortgage. If your second mortgage was obtained at the same time as the first and was used to buy your home, then you can normally refinance both loans into one.

Why Refinancing Into a Single Loan Is Ideal

Why would you want to refinance both loans? Second mortgages generally have a higher interest rate and a shorter timeframe for repayment. Rolling that amount into a 30-year loan would therefore reduce the monthly payment. However, it’s important to note that although the interest rate may be lower, you’ll be paying over a longer period of time. Therefore, the total interest paid will be more for the amount covered by the second mortgage.

Here’s an example from an actual customer.

1st Mortgage – $2066/mo (30 yr fixed @4.25%)
2nd Mortgage – $395/mo (15 yr fixed @4.99%)
Total Monthly Payment – $2,461

If this customer refinanced into a single loan at the current rate of 3.375%, their monthly payment would be $1,972/mo. Their monthly payment would be reduced by $489.

If this same customer only refinanced the first mortgage, the payment on their new first mortgage would be $1773 and they would still have their second mortgage at $395. Combined, that’s $2,168, a savings of $293 per month.

More on Refinancing a First and Second Mortgage

It’s important to understand these rules for refinancing a first and second mortgage before you apply for a refinance. Additionally, remember that interest rates are determined by your credit worthiness. So, maintaining a good credit score will be a huge benefit. Consult with a loan officer to learn about current interest rates and to request a pre-approval based on your particular finances. Mortgage payments and interest rates mentioned above are for illustration purposes only.

Share... Share on Facebook
Facebook
Share on LinkedIn
Linkedin
Tweet about this on Twitter
Twitter
Email this to someone
email
Print this page
Print

Filed Under: Mortgage

Martino Law Group Offices

Phone: (781)606-9002

Main Office:
616 Main Street
Melrose, MA 02176

Haverhill Office:
25 Kenoza Drive
Haverhill, MA 01830

Contact Us
  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Check out Martino Law Group on Yelp

Why Choose Us

  • Wide Coverage Area (MA & NH)
  • Payment Plans
  • Flexible Scheduling
  • Personal Attention & Support
  • Extensive Trial Experience

MA Law Blog

  • Business Law (11)
  • Criminal Law (10)
    • Court Process (1)
    • Domestic Violence (3)
    • Drug Charges (1)
    • DUI and OUI (4)
  • Estate Planning (38)
    • Health-Care Proxy (2)
    • Trusts (7)
    • Wills (5)
  • Family Law (56)
    • Child Custody & Visitation (5)
    • Divorce (48)
      • Alimony (6)
      • Assets (9)
      • Finances (6)
    • Prenuptial/Postnuptial Agreements (2)
  • Misc Topics (12)
    • Avoiding Scams (2)
    • Identity Theft (3)
  • Personal Injury (51)
    • Auto Accidents (9)
    • Brain Injuries (1)
    • Medical Malpractice (2)
    • Other Injuries (4)
    • Pedestrian Accidents (3)
    • Product Liability (1)
    • Work Related Injury (5)
    • Wrongful Death (5)
  • Real Estate (126)
    • Commercial Properties (1)
    • Foreclosure Law (2)
    • Home Buying (50)
    • Home Ownership (11)
    • Home Selling (31)
    • Investment Properties (4)
    • Landlord Tips (6)
    • Mortgage (18)
    • Rental Law (16)
  • Uncategorized (3)

Martino Law Group | 781-606-9002

Martino Law Group offers legal representation and counsel for clients in Eastern Massachusetts including the North Shore, Greater Boston, and Metrowest Communities. Our primary service areas include Melrose, Wakefield, Reading, Lynnfield, Medford, and Winchester Massachusetts.

Copyright © 2021 Martino Law Group, All rights reserved. | Privacy Policy