Refinancing a 2nd mortgage into a HELOC possible?

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ma21n2
Posts: 211
Joined: Fri Sep 28, 2018 9:25 pm

Refinancing a 2nd mortgage into a HELOC possible?

Post by ma21n2 »

Hello,

I currently have two mortgages -- the main one is a 15 year fixed (2.5%) and the second mortgage is an employee relocation assistance loan (0%). The 2nd mortgage is about $200K and the whole amount is due next year (balloon payment).

I'm looking into getting a HELOC from Third Federal (seems to be popular here) to pay off the 2nd mortgage next year. My understanding is that since HELOC is a line of credit, opening one doesn't include paying off an existing lender (unlike mortgage refinancing). If so, does it mean the lender will only consider the equity that I currently have in my house with both mortgages? (as opposed to equity I will have once I pay off the 2nd mortgage using HELOC)?

Also, Third Federal says HELOC is only available as a first or second lien, but I currently have two liens on my house. Does that mean I can't even get their HELOC? (even though I plan on paying off the 2nd mortgage w/HELOC)

Thank you.
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