Cash-out second mortgage using appraised value (mortgage broker, refinancing, loans)

[bentley_1985]

Hello,

First time posting in this forum. I have two mortgages (say $x)and the second one is a HELOC. Assume that the loan amount for the second loan is $70,000 and I've already paid out $50,000, so the remaining balance is $20,000. Also, my house has appreciated around $70,000.

1. I'm thinking of withdrawing the $50,000 I paid-off in my HELOC. Then going for a higher loan amount on the first mortgage such that the new first mortgage funds both my primary and secondary loans. So essentially, after refinancing, I will have a single mortgage with the loan amount $x + 70,000 and I'll have $50,000 in my pocket. Is this a viable scenario for me?

2. I'm not sure whether people do this, so I'm reluctant to reveal this information to my lender. Is it okay to discuss this situation with my lender?

3. Will this affect my 1st mortgage approval? I'm worried that the transaction history might render me suspicious.

Many thanks in advance.

[Wintermomma]

Couldn't you just do a cash-out refinance that pays off both your first and second? Seems simpler. I don't know if that affects rates or not...I can't see it hurting to ask your mortgage broker, usually they want your business. I will say I haven't worked in the industry since before it went belly-up and admittedly back then they were giving money away at all costs. I still cannot see it hurting to discuss your options with the broker.

[bentley_1985]

Thanks, Wintermomma. I checked with our broker and looks like cash-out refinancing is not an option. I'll open up the discussion with the broker and see how it goes. Thanks for your advice.