Is a second mortgage best in this case

brindirhea · Joined: 09 Dec 2008 Posts: 1 1.36 Dollars($)

We owe $97,000 on our 15 year mortgage. Our house was just appraised and listed for $295,000 however we need $60,000 for land purchase now. Is a second mortgage the best option now.

parmoney · Joined: 05 Dec 2008 Posts: 37 11.32 Dollars($)

I don't like seconds (high interest rates or teaser arms) but would need more details about the 15 year mortgage your in.

How much time remaining?
Interest rate?
etc.

Guest 0.10 Dollars($)

7 years left and interest rate is 4.25

parmoney · Joined: 05 Dec 2008 Posts: 37 11.32 Dollars($)

awesome loan!

The land your looking to purchase, is the price 60k or are you using this as a down payment and financing the remainder?

sara · Posted: Thu Dec 11, 2008 3:29 am Post subject: RE: second loan for land purchase

You're right Parmoney, it's indeed an awesome loan. I mean it's after a long time that I hear someone mentioning such a low rate on a fixed rate mortgage. It's not clear from the OP's question as to whether or not he needs the money for the down payment. But I suppose a second mortgage can be an option worth considering, isn't it?

I could have suggested a cashout refinance of the existing loan. But it doesn't make sense especially if the OP already has a low rate on the existing mortgage. He won't actually benefit from the low rates.

Take Care

williamwfergusonjr · Joined: 11 Dec 2008 Posts: 7 4.50 Dollars($)

If you are sure your house will sell, take a second as a bridge loan, and pay it off at closing. People do this type of bridge loan everyday. It has nothing to do with the terms of the first mortgage. The only thing that matters here is the market where your house is, and if for sure it will sell before you go broke paying two payments. If you are in a decent market and the appraisal is correct, a bridge loan is the right thing to do.

parmoney · Joined: 05 Dec 2008 Posts: 37 11.32 Dollars($)

I would check with your local credit union (if your a member). They tend to have better 2nd's or they may even have a loan on the land your looking to buy without encumbering your owner occupied residence.

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