You have a variety of
options for your mortgage refinance. Refinancing to
combine a first and second mortgage into one payment saves time
and effort that occur when you make payments to multiple
lenders. Consolidating a first and second mortgage also opens a
junior mortgage lien position on your home if you decide to take
out a home equity loan or line of credit in the future.
Lower payments. Perhaps you want to ease the burden of making
payments on a 15-year mortgage loan by refinancing with a
30-year mortgage. Stretching out your loan term reduces your
monthly payments. If you refinance to lower your payments,
however, make sure your new mortgage doesn't impose a prepayment
Consolidating other debts. You may want to refinance in order to
pay off an auto loan or credit card debt. After all, the
interest on a mortgage or home equity loan is tax-deductible in
most cases, while the interest on consumer debt is not.