Refinancing and consolidating
The loan is considered safer to the lender because the borrower isn’t pocketing any money or reducing the amount of equity they have in the property.You may have refinanced recently when mortgage rates dropped to historic lows. According to Casey Fleming, mortgage advisor with C2 FINANCIAL CORPORATION, and author of, “The Loan Guide: How to Get the Best Possible Mortgage,” they are important because the terms and the amount you will pay on new mortgages could be very different.
Luckily, there are mechanisms available with which to combine, or consolidate, two mortgages into one loan.
Having two mortgages isn’t as rare as you might think.
People who amass enough equity in their homes often elect to take out a second mortgage.
But, the consolidation process may itself be tricky and the math may end up not making it worthwhile in the end.
Let’s look at one example: You took out a home equity line of credit ten or more years ago and during the draw period – the time when you could “draw” on your credit line – you were paying a manageable amount: 5 per month on a 0,000 line of credit.
A debt consolidation refinance loan is still a mortgage loan, and thus is eligible for tax deductions.