Refinanced Second Mortgages


Refinanced second mortgages refer to the paying and settling of an existing loan and replacing it by entering into a new contract of debt. When a mortgage is refinanced for the second time, the collateral for the loan doesn’t change. Mortgage refinancing often results in increased amount of the overall loan & time duration but reduced monthly payments or lower interest rates. This is a very popular practice nowadays, because it results in facilitating extra cash flow.

The Procedure-

  1. Determination of requirement & feasibility of refinancing second mortgages.
  2. Analyze data regarding financial position and the expected result of refinancing on it.
  3. Review all the prevailing interest rates in the markets and shortlist from them.
  4. After going through all the collected data, it is decided that which specific scheme of refinancing second mortgages is best suited for the current situation.
  5. Apply for the loan and once it gets approved by concerned authorities finalize the deal after careful analysis of all the conditions.


  • The monthly installments can be lowered than the original amount.
  • Refinanced second mortgages help to build equity in a faster rate which results in favorable financial position.
  • According to the scenarios of the financial market, people also change their investment portfolios. Refinanced second mortgages provide them with this option.
  • Refinancing often results in the betterment of the credit position of an entity by consolidating its debts.


  • The collateral, when mortgaged for the second time remains in a greater risk as inability to pay would mean losing it.
  • Refinanced second mortgages are issued in a comparatively higher rate than the first mortgage.
  • The money that is required to be paid as fees while entering the contract can be quite high.
  • The mobility of the collateral is reduced to a great extent when financed for the second time.


If exercised with due care and diligence, then this kind of refinancing is quite effective. But for a person who lacks experience this type of investment could pose as quite risky. Refinanced second mortgages in general do provide better investment options to experienced investors.