How to Consolidate First & Second ARM Mortgages
Many borrowers have first and second mortgages on their residence. This can make for a hefty monthly payment. To consolidate the two mortgages, the borrower needs to refinance the mortgage into one monthly payment. This can be done if the borrower has enough equity in the home to cover the debt and has proof of income as well.
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Instructions
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Fill out a mortgage application with a lender. You will be asked to provide your full legal name, Social Security number and date of birth. Make sure the lender knows that you want to include your first and second mortgage in the new mortgage loan.
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Bring the mortgage lender a copy of two months bank statements (all pages), two months pay stubs and two years tax returns, including W-2 or 1099 forms.
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Purchase an appraisal by giving the mortgage lender a check for the service. The fee should be between $300 and $400, and the mortgage lender will have to order the appraisal for you.
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Provide the lender with any requested information during the process, depending upon your situation. If approved for the mortgage, you should close within three to four weeks of application.
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Tips & Warnings
Check your credit before making an application with a lender through a free service, such as AnnualCreditReport.com. You will be asked to provide your full legal name, date of birth, Social Security number and credit card information. Check for any errors and get them corrected through the website to ensure the highest credit score prior to application. The higher the score, the better the rate.
If your home is in a declining real estate market, your house may not be worth what it once was. If you owe close to the original purchase price of the home, and it was purchased within the past five years, you may not have enough equity in the home to refinance. Discuss this with your mortgage lender before purchasing an appraisal to make sure you do not waste your money on an appraisal that will not help you to refinance.
