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Was your housing market one of the 24 where relative home affordability improved in 4Q24? Check out our updated Home Affordability Study to find out!

Was your housing market one of the 24 where relative home affordability improved in 4Q24? Check out our updated Home Affordability Study to find out!

Refinance my two mortgages into one?

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Q; I currently have a Cal-Vet loan of $220,000 at a 4.5 percent interest for 25 years. I have already paid 5 years on this loan. I also have in place a second lien of $30,000 at 7 percent for 15 years. I already paid 5 years on this second.  Should I refinance both loans together for 15 years.

A: With 20 years remaining on your first mortgage and 10 on your second, you certainly could consider refinancing them into a single loan. Open-market interest rates are unlikely to be substantially better than what you have now on your first mortgage, so consolidating them together for a shorter term will probably cause a rise in your total monthly payment. By our reckoning, that increase would be less than $35 per month, but you could save a bundle of money by not having those additional five years of mortgage payments. If you have sufficient equity in the home and your credit is good, it sounds like a good idea to us.

Related: Should we do a consolidation refinance?

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