By Admin on Dec 8, 2008 in Other - Home & Garden
gwizzle2002 asked:
I am financing a pool and was told by the lender that a refinance and a second mortgage are the same thing. Is that correct?
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I am financing a pool and was told by the lender that a refinance and a second mortgage are the same thing. Is that correct?
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No. A refinance gives you a new mortgage with a lower interest rate.
A second mortgage is a mortgage taken out on property that already has one mortgage, with priority in settlement of claims given to the earlier mortgage. In other words, you have two mortgages.
tonalc1 | Dec 10, 2008 | Reply
A second mortgage would be a loan in addition to your primary mortgage where your home is the collateral for the loan. A home equity loan could be described as a second mortgage.
A refinance would be getting a new mortgage with new terms. When you refinance, you pay off your prior mortgage and start with a new one.
Donald G | Dec 11, 2008 | Reply
The LENDER told you that??? You refi your current mortage (usually to a lower oercent and remove some equity to pay for your pool), but you can open a new, seperate SECONDARY mortage to pay for your pool too.
mediawhore94561 | Dec 12, 2008 | Reply
Pretty much: yes. Differences lie (no pun intended) in the intrest percentage charged. And there may be options from the lender to “sell” your mortgage/refinance case to another bank, who then can RAISE the intrest owed.
Check the fine print and ask a trusted investment attorney for laymen’s explanation of any such deals; laws vary from state to state.
In the end, they both meet one end if you default on the deal: you lose your house.
Mr. Wizard | Dec 15, 2008 | Reply