Is Refinancing to Combine Two Mortgages a Good Idea. – It might not be a good idea to combine two mortgages with a prepayment penalty, which can be an added cost when you refinance. Combining two mortgages into a single loan may be a good idea but if you have doubts, it’s best to think things through. Don’t be afraid to seek advice from mortgage professionals.
The second mortgage is a new loan and there are fees involved. There are loan origination fees, appraisal fees and closing costs as there were with the first mortgage. The second mortgage may be harder to obtain. When a first mortgage is refinanced, the lender has the first lien on the property if there is a foreclosure or loan default.
home equity loan explained Home Equity Loans Explained | RE/MAX Hometown Choice – A home equity loan is basically a second mortgage on your home. It lets you convert the portion of your home that you own, your equity , into lump sum cash that you can use for major purchases like renovations, college or debt consolidation.