Whether or not you will be able to consolidate these loans into one loan through a refinance will primarily be determined by your current equity position. If your new loan to value (after adding both loan together) is under 80%, I would say you have an excellent opportunity to combine both loans into a single loan with one low rate. If your loan to value is higher, you will be subject to mortgage insurance and the benefit of refinancing may not be as prevelant; but that is not to say you should not explore the option; with rates at historical lows (5/2009) refinancing into a program with mortgage insruance may still make sense if you plan on keeping your home for a long period of time because mortgage insurance can be removed through petition once a larger equity position is accomplished. If you are upside down and currently owe more than your home is worth, unfortunately there is not a program that would allow you to consolidate a first and second from an upside down position at this time.
Assuming you do
hold an equity position and are ready to pursue a refinance, keep in mind you will have to qualify for the new loan, which means qualifying under new guidelines. Depending on how you qualified for your past financing, this could be problematic due to increased documentation requirements. In today's market borrower's are expected to provide proof of income and assets, which was not a requirement in the years past.
For this reason, I would highly recommend contacting a broker that can evaluate your situation completely. That means completing a full loan application and running credit. This fifteen mimute exercise will provide an experienced loan consultant the information needed to determine whether or not you will be able to consolidate both loans and the benefit in doing so.
From the rates you have listed, I would not delay, you will save a substantial amount of money if you successfully refinance.
Answer Submitted on Thu, May 14 2009
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