Low Interest Home Equity Loans
When i bought the house (600K) the mortgage was split into two pieces
380K + 220K to avoid paying the PMI insurance. The problem is that
the 220K has a high interest. I have refinanced the 380K portion to a
low interest recently. I know that the house prices have gone up
(approx 800K). The question is, can i get a home equity loan and get
rid of the second mortgage and hopefully in the end pay a smaller
interest on the home equity payments than i would if i continue with
the 220K loan as it is. (since it is a subordinate finance loan, i am
not being able to refinance it. So please help me specifically answer
the Usage of home equity with lower interest rate to pay the
subordinate loan question). Also, are there any tax implications?
(it is a primary residence)
If the value is really $800k, you should be able to refi the entire
$600k as a single loan. You really bought a $600k house no money
down? Should you have bought a cheaper house with a smaller loan?
A home equity loan *is* a second mortgage. So what you're doing is just a
form of refinancing the second loan.