2007-03-16 12:40:21 · 3 answers · asked by tishabee 1 in Business & Finance ➔ Credit
OK more info....I have a 1st and 2nd mortgage. They are both adjustable so we could get in the house. We are planning to start refinance paperwork about 45 days before the adj rate goes into effect.
2007-03-16 15:58:25 · update #1
Doing a refi is different that just taking out an equity loan.
If you are still within the 2 years when you refi the loan the prepayment penalty is tied to, you will have to pay the penalty.
2007-03-16 16:39:03 · answer #1 · answered by echo 7 · 0⤊ 0⤋
I assume you have a prepayment penalty on your first mortgage? I am also assuming you do not currently have a second mortgage. In most states the prepayment penalty is limited to 1% of the outstanding balance of the loan. Depending on what this represents in dollars, you might choose to take out a second mortgage or home equity line of credit. These loans are typically very inexpensive, and in this way, you could avoid incurring the penalty on the first.
One caveat: I would be careful not to take all the equity out of the home on a second mortgage if your first mortgage is an adjustable rate. You would find it much more difficult to refinance that first mortgage in the future if you've got a big old second mortgage balance too!
2007-03-16 22:00:12 · answer #2 · answered by jason n 2 · 0⤊ 0⤋
If you're talking about a prepayment penalty on a first mortgage, then apply for a home equity loan or credit line.
2007-03-16 19:45:48 · answer #3 · answered by nickfromct 3 · 0⤊ 0⤋