Leaving The Mortgage Home Loan As Secondary?

Q: Is it possible, in California, to refinance a first mortgage in place, leaving the Mortgage Home Loan as secondary? The detailed situation. I have a fixed-rate first mortgage, and a home-equity line of credit as the second mortgage. I'd like to refince the first mortgage for a shorter term and lower interest rate, while leaving the line of credit intact.

A: It's possible, but only when the amount of the debt is not increased, the current lender does the refinancing, and it doesn't require a new deed of trust. If they will substitute a new note for the old one leaving the old deed of trust in place. Will they? They may not. If not, ask the line of credit lender to subordinate their deed of trust when you refinance the first, which will result in the second continuing to be a second. What does the contract for the second mortgage say? You might need the permission of its holder. If you're refinancing the first mortgage to lower the rate, and not raise the outstanding balance, then the holder of the second should be happy with that (he remains equally protected, and you're more likely to be able to afford to pay him). If there's no outstanding balance on the second, you could just cancel it (and get a new one); if there is such a balance, would you be better off increasing the amount of the first mortgage to pay it off?

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