How to get a 2nd Mortgage Subordinated.?
by Mortgage Rates on Sunday, October 31st, 2010 | 2 Comments
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This is pretty standard, most require you to pay off all mortgages when you refinance, you can not refinance part of what you owe on the property.
You will pay them off with your new loan, the same with the first.
in order to get the 2nd to subordinate you need to give the a good reason, why is it in their best interest to give up their position on title? here are a few suggestion to consider when negotiating with the 2nd:
– offer to pay down the principle balance
– offer to increase the interest rate
– show some improvement to the property that will increase the value of the property and secure their 2nd loan position with additional equity
a new technique that is coming back to the market is to utilize an extended loan rescission. basically, if you can find and prove that the loan company made mistakes in their Truth in Lending disclosures, you would have the right to rescind the loan with the 2nd. once the loan is rescinded the lender has to remove their lien against the property. with the lien removed you can refinance the 1st. the 2nd is probably going to try and negotiate with you to reattach their lien but they will be in 2nd position after the refi and you’ll probably get better terms in the negotiation. it’s a great deal for an owner-occupied property but you’ll need to make sure that you know what you’re doing legally (i’d check with an attorney who specializes in rescissions).