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zain_1_2001 · Joined: 14 Apr 2009 Posts: 1 1.39 Dollars($)

I am sorry but I am confused. My sister bought a house on my parent's name that they are paying mortgage so far regularly. I came to know my sister took the scond mortgage too on the same house on my parent's name. My parents don't know anything about the paper work and also they don't know the language. They asked my sister about the second mortgage and she replied that two banks gave the loan for the house that is why the 2nd mortgage coming from the 2nd loan. My question is that is there a possiblity that my parents just could rely on first loan and didn't have to get second loan? why did they have to get second loan while they didn't need it?

mtgfixit · Joined: 13 Apr 2009 Posts: 73 28.11 Dollars($)

If you are able to look at the paperwork from the closing, you will know right away if the 2 mortgages were taken out at the same time. here is what you need to look at:

1. Look at the settlement statement, on the left hand side you will see a line that states another mortgage company and a loan amount

2. If you are unable to find what you are looking for, I could walk you thru it

3. If you cannot get the paperwork, you can call the title company and ask for a copy of the title report, and see if both mortgages were recorded at the same time

Sometimes, people take out a 1st and 2nd mortgage to avoid PMI (private mortgage insurance), or they simply wanted some cash out.

Hopefully this helps you, if not, feel free to ask more questions

jenkin7 · Posted: Thu Apr 16, 2009 1:18 am Post subject:

Hi zain,

It depends on the situation whether you need a second mortgage to purchase a home. When you go for a more than 80% loan, you are required to pay a Private Mortgage Insurance. In order to avoid that, people limit their first loan to 80% and arrange the rest of the money through a second mortgage. One can also take a second loan if one needs some cash for some reason.

gmakerley · Posted: Thu Apr 16, 2009 7:40 am Post subject:

zain, if your parents had legal representation at this closing (and if they didn't, why not?), that is your best source for this information. the attorney can explain what took place and how it took place for you. if the second mortgage was taken subsequent to the closing, then your sister will have to provide a better explanation than what she's apparently given so far.

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Is the first loan taken from the lender enough to buy a house?