Refinance or Home Equity



I did a loan mod 2+ years ago

180k first
25k second, no payment/interest

home value about 290k

I'd like to take out about 40k equity Loan. Pay off high interest loans (20k), and build out this 450sqft pool house (architectural plans are on hand). Contemplating refinancing into a 15 year loan from a 30. I've lived here about 3 1/2 years.

Because of this 25k second, im not sure what my best options are?
Credit score 680+

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
Hi Pcazar, the 2nd lien must be in charged off status in order for you to refinance otherwise you'll run into payment history requirements on a traditional type product. I do have options that avoid needing to show 12 months clean on payments but the a typical conventional lien can be offered assuming the charge off is older than 4 years.

I would HIGHLY recommend refinancing and either negotiating with the 2nd to payoff a lower balance (you can do this as long as it's charged off) - or paying them off in full to prevent any type of future foreclosure activity. If you cruise around the forum, you'll see that 2nd mortgages are coming back to haunt people, filing notice of defaults, intent to accelerates and things like that. On average, I'm refinancing a charged off lien about once a week.

Feel free to call me or e-mail with any questions: 619-379-8999 or [email protected]