Does that get affected if we do the refinancing with the second loan as a home equity loan?
Does that get affected if we do the refinancing with the second loan
as a home equity loan?
Sounds like a reasonable plan. Any "catch" would be in the interest rate, since
you seem to have asked the other common questions.
Ask about loan servicing and escrow terms -- to whom will you make your monthly
payments, and who will be responsible for maintaining the records, escrow
account, etc? How will your escrow payments be determined, so you aren't forced
to keep excess money in a non-interest-bearing escrow account? If a local
company services the loan, that's a bonus. If the loan servicing cannot be sold
without your permission (which does not affect the broker's ability to resell
the loan itself, a common practice), that's a bonus.
"Second mortgage" and "home equity loan" are 2 names for the same thing. As
long as the 2 loans are for less than the value of your house, they are tax
deductible (check the IRS instructions/pubs for details).