Originally Posted by dad2jules
Beachmouse it is not as bad as you were told.
1st off you should not be asked to do anything- your broker or lender takles care of it all.
Yes, you do have to request the subordination as you said and it is to remain in 2nd lien position. It is not a fiasco or typical corporate BS.
The 2nd mortgage holder is basically reunderwriting you to re affirm that you have sufficient income, payment history, credit score and equity in the property as well as wanting to see the terms of your potential refinance to document that you are getting a better loan.
This takes approximately 1-2 weeks not 2-3 months(though some smaller banks were at the peak of refinancing last spring).
Most banks also charge an upfront fee to look at the request- typically anywhere from $125- $175 so be prepared to pay this as well.
The challenge and "scary" part about this is there are no guidelines to reference. It is done on a case by case basis so no one can tell you your preapproved.
Look at these posts about a BOA subordination.
End of story I refinanced and paid off the 1st , but for many people their LTV will exceed 80% when doing this.
On another note if you have good credit and solid employment a local bank that does not sell their mortgages can blow away all the other so called banks!
There are not many around but they are there.
Also if rates go down , with one of theses banks you can pay approx imately $1500 and they will modify the rate.
Also if you come into money and want to pay off part of your mortgage and have them recast it for a lower payment it is the same $1500.
I take it the "beachmouse" comment was a typo