The idea of refinancing your second mortgage is undoubtedly attractive – if you can pay off your present 2nd mortgage by obtaining another with better terms. But beware – refinancing your 2nd mortgage is only advisable under some situations. Study the prevailing interest rates and determine whether they are conducive to refinancing. Are the effective interest rates lower now than when you obtained your second mortgage? If so, then refinancing makes sense.

Refinancing can be tricky, so be prepared to do careful math before you decide. Take into consideration the length of time it will take you to pay off your home, and how much you will be paying (in total) over the years if you stick with your present 2nd mortgage or decide to refinance.

Before you refinance, be sure to properly educate yourself about the advantages and disadvantages of refinancing your 2nd mortgage. Refinancing has the power to put you in a better place if you use it properly, but can also yield catastrophic results when poorly timed. Such catastrophic results include ending up paying higher rates, having longer re-payment periods, a change in heart that could lead to yet a third refinance, or even the worst: foreclosure. Nobody wants that, but foreclosure occurs every day as a result of people being unable to keep up with payments.

Consult a trusted mortgage-lending expert before making your decision. If your current finance situation does not absolutely require you to refinance or get a second mortgage, then do not refinance. Stay the course and wait until you are sure before you change course.

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