Question about 2nd mortgage

[patkatmom]

Hi all - This forum was so helpful when we filed 3 years ago and now I'm back with a question.

We were discharged 2 1/2 years ago - can't find the date atm - and we did not reaffirm our first mortgage (Chase) or 2nd (GMAC).

We continue to pay our first mortgage but was advised to not pay the second and that they would get their money when we sold our house.

We are currently 1 month behind on our mortgage, but will catch up once I go back to work at the end of the month and my husband receives his coaching pay in September. (Summers are hard and we didn't budget well this summer). I called to make our Chase payment and they suggested loan modification. We don't qualify for a HAMP loan and I guess might qualify for in house.

My question is, if we decide to try and refinance instead how does the GMAC loan come into play? Our payments are 2074/month and they just keep going up because of our taxes and my husband hasn't received a raise in many years and the school system is cutting back on health insurance and that's costing us more. We would like to lower our payment to make our lives much less stressful.

Does anyone have words of wisdom?
Thanks for reading!
Stacey

[despritfreya]

If you attempt to refinance your 1st mortgage, unless the 2nd is going to agree to subordinate its lien position to the new lender (not going to happen), you will have to refinance both the 1st and 2nd. As a result, if there is no equity in the property you will not be refinancing.

If you are having a difficult time with the 1st, try the loan modification route. That route does not impact the liens since you would be modifying an already existing mortgage. Therefore you do not have to get the 2nd to “agree”.

Edt. Your lender has its own "modification" programs (other than HAMP). If you have not already done so, start asking about them.

Des.

[patkatmom]

Thanks, that's what I thought. We can afford the mortgage, just have a harder time in the summer and thought a lower payment would be nice.

We have a few more years until we outgrow this house and then we're going to try getting a decent interest rate and moving.