November 15th, 2012 10:16 AM by Eric Fang
Q: My First Loan amount is 417k with 2nd Loan 200k.The property Value is 650k. Can I get better rateif I choose FHA loan with loan amount 617k.
A: Let me try to answer your question by the risk management. With only 33k equity in the property,the lender has some risk for keeping your loans.So usually they will have higher rates. But when youhave piggy back loans, the risk for the two loans are different. Your 1st loan lender has minimum risk.So if you defualt in the future, the first loan lender can get almost all the money back.But the 2nd loan lender is different.
Now back to the question of consolidate the two loans.The risk will get back to only one lender withonly 33k equity for 617k loan, if the lender wouldget you the loan, the rate will be very high.
Plus, any loan amount over 417k will have the rate around 0.25% to 0.375% higher; and the if this is cash-out loan(2nd loan is not the original at thepurchase), this loan is not doable.