I purchased my home in 2007 with a second mortgage from my employer as downpayment. It's a so-called "Silent Second" which means no payments are owed until the house is sold or refinanced.
My question is what effect that 2nd mortage will have on my application for a home equity loan. Notwithstanding the 2008 recession, we've built up quite a bit of equity in our home over the past 13 years. Now we need to make some improvements but I'm concerned the 2nd mortgage will affect our ability to get approved for a home equity loan or HELOC.
Anyone know how a 2nd mortage on the home typically factors in home equity lending?
That's a good question, but because of subordinate financing rules you might have problems unless you basically pay off the silent mortgage with the HELOC. I was pursuing the refi of my LA condo before I clearly had an order of operations issue, but they explicitly asked about the HELOC and if I didn't close it, rate was going to be higher. Was OK for me as I'm planning to simply reopen the HELOC at a much larger dollar amount as soon as the refinance closes anyway.
I'd ask the lender in question, or maybe consider just doing a cash out refi anyway honestly.
