Refinance Second Mortgage

A refinance second mortgage is a method by which a homeowner can capture equity that has been growing on a house through regular monthly house payments and use that equity for other pressing financial issues. A house mortgage has been likened by some financial advisors to a piggy bank that is constantly being fed by the home owner and can be turned upside and shaken to retrieve cash for rainy day expenses. However, this equity building takes a while because in the initial years of a property lending agreement much more interest is being paid than principle. And since some borrowers choose interest only lending agreements or agreements that are balloon type, very little equity is available and the house shaking or the refinance second mortgage opportunity is probably not an option.

But a refinance second mortgage loan is certainly available for those home owners who have been faithfully paying their monthly mortgage payments and had gotten a low rate fixed property lending agreement or adjustable rate mortgage that has remained low in interest over the years. And for those made a ten or twenty percent down payment on their initial property lending agreement, or had paid more on the principle each month than was required, much more equity is available by about the tenth year of the first property loan. In these cases, a refinance second mortgage is very possible in order to cash out on the equity available and perhaps be able to get an even lower rate of interest.

Let's take a look at how this might work in the life of Mr. and Mrs. "I Feel a World Cruise Coming On." This couple has worked long and hard over the years and now wants to enjoy some of the fruits of their labor. Fifteen years ago the twosome bought an eighty five thousand dollar house somewhere in the southwest which has been recently appraised for one hundred and forty thousand dollars. Because Mrs. World Cruise has been putting an extra hundred and fifty dollars on the principle each month since owning the house, the amount owed on the house has dropped to fifty two thousand dollars, leaving them with an equity of eighty-eight thousand dollars. While the duo thought long and hard about getting a home equity loan, after talking to a financial expert the decision was made to get a refinance second mortgage lending agreement. In this type of lending agreement, the couple would refinance the first property lending agreement a second time and cash out some of the equity for that three month cruise.

"For whosoever will save his life shall lose it, but whosoever will lose his life for my sake the same will save it." (Luke 9:24) The decision was made by the World Cruises to get a refinance second mortgage loan for eighty thousand dollars. This would allow them to go from an adjustable rate mortgage to a fixed rate property lien and only up the monthly house payment fifty dollars from the original residential lending agreement. After paying for the points for the new refinance second mortgage, the couple would have about twenty five thousand dollars to get a lower berth room on an around the world cruise that Mrs. World Cruise had always dreamt of taking. This was all made possible by the fact that this hardworking couple had maintained excellent fiscal practices over the years and could easily breeze through the financial vetting process for this second go around at a primary mortgage lending agreement.

The couple would be able to bask in the beauty of Cape Horn and the wonders of Hong Kong because of an excellent credit score. While the average American's credit score is about 620, the husband and wife had been fortunate to maintain a score of over 700 during their years together, and recently the score had been rising higher. Being able to pay off debts had reduced the debt to income ratio to almost twenty two percent and that helped in raising the credit score higher. For many Americans who live paycheck to paycheck, a debt ratio above forty percent is strangling the ability to live with discretionary income to save and use wisely. And the ability to get a refinance second mortgage lending agreement would certainly be out of the question ending the possibility of getting help to pay off high interest credit cards and other financial strangleholds.

Someone once said that it's a shame that youth is so unwisely spent on young people! After all, so many of the mistakes that haunt us all our lives are made at a time when all knowledge is assumed to be a personal accomplishment. But as so many people finally admit, by the time the age of thirty rolls around parents seem to suddenly have gotten a whole lot smarter! For many, poor money decisions made during young adult years are a shadow that cannot be shaken off as time moves on and so world cruises or college tuition or that extra bedroom addition and a small mother-in-law house aren't possible. And the hope of starting over isn't even a tiny blip on the radar screen.

Getting to refinance a mortgage a second time is a great opportunity to do something over again that maybe wasn't quite right the first time. Getting a lower interest rate or being able to make the mortgage lower a second time around can really change a family's financial situation. Of course, a lot of decisions aren't possible to redo. Some of them are absolutely tragic. Living like God doesn't count and dying without His forgiveness is the worst unfixable decision anyone can make.

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