MND Q&A

Turning an equity loan into the 1st mortgage position

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Hello to all whom it may concern:

Our situation – mortgage is paid off. equity loan is a 30 year fixed at nearly 8%. the investment property still has equity into it but is below the 20% requirement.

I want to convert the 8% equity loan into a 1st position 30 yr fixed mortgage loan at a lower interest rate. Is it still possible to do if my current equity is below the 20% guideline?

6 months ago Ted Rood said:
 

You could take out a new first mortgage at a greatly lower rate and payment, even with the addition of PMI. Another alternative would be to take out a new HELOC to replace the existing one. Can’t tell if you are saying the equity loan is on your primary residence or on the investment. If it is one the investment property, lack of equity will definitely be an issue for you.


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Yes you can! I would take the loan to 80% of the appraised value with today’s lower market rates and leave whatever is left on the HELOC (subordinate).

Answered 5 months ago
Melvin List
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Yes you may. It will still be an equity title, but at a much better rate. Contact me for mortgage details.

Answered 6 months ago
Steven Weinberg
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